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JISTEM JOURNAL OF INFORMATION SYSTEMS AND TECHNOLOGY MANAGEMENT REVISTA DE GESTÃO DA TECNOLOGIA E SISTEMAS DE INFORMAÇÃO

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ISSN: 1807-1775

Volume 10 : Number 3 : 2013

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JISTEM Journal of Information Systems and Technology Management Revista da Gestão da Tecnologia e Sistemas de Informação ISSN online: 1807–1775

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Universidade de São Paulo – FEA USP Prof. Dr. João Grandino Rodas – USP Reitor/Rector Prof. Dr. Hélio Nogueira da Cruz – USP Vice-Reitor/Vice-Rector Prof. Dr. Reinaldo Guerreiro - Diretor da FEA/Dean of FEA Editor Prof Edson Luiz Riccio, PhD. University of São Paulo – FEA, São Paulo Brazil Assistant Editor Marici Gramacho Sakata, PhD. TECSI University of São Paulo – FEA, São Paulo Brazil Editorial Board – Comitê de Política Editorial Armando Malheiro da Silva, University of Porto, Porto, Portugal Christophe Benavent, Université Paris Ouest Nanterre La Defense, Paris, France Henrique Freitas, Federal University of Rio Grande do Sul, Rio Grande do Sul, Brazil JaeJon Kim, Chonnam National University, Gwangju, Korea Luc Marie Quoniam, University Paris 8, Paris, France Michael D. Myers, University of Auckland, Auckland, New Zealand Miklos Vasarhelyi, Rutgers Business School, New Jersey, USA Rejane Maria da Costa, University of Brasilia, DF, Brazil Robert D. Galliers, Bentley College, Massachusetts, USA Editorial Review Board – Comitê Científico Editorial Adam Mazurkiewicz, Instytut Technologii Eksploatacji, Poland Adalberto A. Fischmann, University of São Paulo, São Paulo, Brazil Antonio Carlos dos Santos, Federal University of Sao Carlos, São Carlos, Brazil Birger Hjorland, Royal School of Lis, Copenhagen, Denmark Burak Arzova, Marmara University, Istanbul, Turquia Dennis F. Galletta, University of Pittsburgh, Pittsburgh, USA Emerson Maccari, Uninove, Sao Paulo, Brazil Fabio Frezatti, University of São Paulo, São Paulo, Brazil Fernando Colmenero Ferreira, University of Madeira, Madeira, Portugal Geraldo Lino de Campos, University of Sao Paulo, Sao Paulo, Brazil Gilson Schwartz, University of Sao Paulo, Sao Paulo, Brazil Guilherme Ari Plonski, University of São Paulo, São Paulo, Brazil Jan Capek, Univerzita Pardubice, Pardubice, Czech Republic Jose Dutra de Oliveira Neto, University of Sao Paulo, Sao Paulo, Brazil José Rodrigues Filho, Universidade Federal da Paraíba, Paraíba, Brazil Miguel Juan Bacic, University of Campinas, Campinas, Brazil Napoleão Verardi Galegale, Centro Paula Souza and Galegale Associados, Sao Paulo, Brazil Rosana Grillo Gonçalves, University of Sao Paulo, São Paulo Brazil Salvador Ruiz-de-Chavez, APCAM, Ciudad de Mexico, Mexico Published by TECSI - Laboratório de Tecnologia e Sistemas de Informação - Revista de Gestão da Tecnologia e Sistemas de Informação - EAC FEA USP Av. Prof. Luciano Gualberto, 908 FEA 3, Cidade Universitária - São Paulo/SP 05508-900 Brasil Fone: 55-11-3091 5820 r.190 Fax: 55-11-3091 5820 jistem@usp.br Indexation/Directories SciELO, Latindex, Proquest, Ulrich's Periodical Directory, DOAJ, The Index of Information Systems Journals, ACPHIS, Dialnet, Ebsco, Gale Infotrac, CLASE, Portal de Periódicos USP, Qualis CAPES, Cabell's Directory Webmaster jistem@usp.br Technical Support Equipe TECSI pesquisatecsi@usp.br Terms and Conditions The license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials. Direitos e Permissão Os artigos são de total responsabilidade dos autores e todos os direitos reservados ao TECSI. Esta licença permite que outros distribuam remixem e construam sobre a sua obra, mesmo comercialmente, desde que lhe deem crédito pela criação original.

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JISTEM Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No.3, Sept/Dec. 2013, pp. 459-460 ISSN online: 1807-1775

Volume 10: Number 3 / Volume 10: Número 3

2013

Content / Índice Editorial

459-460 461-462

The Development of Value Systems and the Role of Information Systems in the Portuguese Insurance Industry O Desenvolvimento dos Sistemas de Valor do Setor Segurador Português e o Papel dos Sistemas de Informação Bruno Alexandre Ribeiro Marques, Lisbon, Portugal

463-482

The Role of Worker Tenure and Employment Heterogeneity on Software Development Work Activities Jeff Crawford, Lipscomb University, Nashville, TN, USA Lori N. K. Leonard, The University of Tulsa, Tulsa, OK, USA Kiku Jones, Quinnipiac University, Hamden, CT, USA

483-502

The Influence of Shared Mental Models Between the CIO and the Top Management Team on the Strategic Alignment of Information Systems: a Comparison Between Brazilian and US Companies Nicolau Reinhard, University of São Paulo, São Paulo/SP, Brazil José Ricardo Bigueti, University of São Paulo, São Paulo/SP, Brazil

503-520

Metamodel of the IT Governance Framework COBIT Metamodelo do Framework COBIT de Governança de TI João Souza Neto, Catholic University of Brasilia – UNB, Brasília/DF, Brazil Arthur Nunes Ferreira Neto, Catholic University of Brasilia, Brasília/DF, Brazil

521-540

Understanding Organizational Memory from the Integrated Management Systems (ERP) Gilberto Perez, Universidade Presbiteriana Mackenzie, São Carlos/SP, Brazil Isabel Ramos, Centre Algoritmi, University of Minho, Braga, Portugal

541-560

Cash Management Policies By Evolutionary Models: A Comparison Using The MILLER-ORR Model Marcelo Botelho da Costa Moraes, University of Sao Paulo, Ribeirão Preto/SP, Brazil Marcelo Seido Nagano, University of Sao Paulo, Ribeirão Preto/SP, Brazil

561-576

Information Technology Management System: an Analysis on Computational Model Failures for Fleet Management Jayr Figueiredo de Oliveira, Getúlio Vargas Foundation, São Paulo/SP, Brazil Marcelo Eloy Fernandes, Nove de Julho University, São Paulo/SP, Brazil Carlos Roberto Camello Lima, Methodist University of Piracicaba, Santa Bárbara d’Oeste/SP, Brazil

577-596

IT Management Model for Financial Report Issuance and Regulatory and Legal Compliance José Rogério Poggio Moreira, Universidade Salvador (UNIFACS) - Bahia, Brazil

597-620

R. Gest. Tecn. Sist. Inf. /JISTEM Journal of Information Systems and Technology Management, Brazil

2 Content / Indice

Paulo Caetano da Silva, Universidade Salvador (UNIFACS) - Bahia, Brazil 9

Impacts of a Relationship Model on Informational Technology Governance: An Analysis of Managerial Perceptions in Brazil Adriano Weber Scheeren, Getulio Vargas Foundation, Rio de Janeiro/RJ, Brazil Joaquim Rubens Fontes-Filho, Getulio Vargas Foundation, Rio de Janeiro /RJ, Brazil Elaine Tavares, COPPEAD Graduate School of Business, Rio de Janeiro/RJ, Brazil

Events / Eventos

621-642

643

Contributions / Submissão de Artigos

644-646

Editorial Information 2013 / Informações Editoriais 2013

647- 657

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JISTEM Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol.10, No. 3, Sept/Dec. 2013, pp. 461-462 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300000

Editorial - 10 Years of JISTEM Edson Luiz Riccio, Editor

Dear Readers and Contributors In this editorial, with which we ended the year 2013 I take the opportunity to remind all our readers and reviewers about the important facts surrounding our academic activities during this period: A - 10th anniversary of JISTEM - USP - Journal of Information Systems and Technology Management With this issue we celebrate 10 years of JISTEM, a journal that was created in 2004 along with CONTECSI - USP International Conference of Information Systems and Technology Management. We decided to bring to mind some of the relevant facts on JISTEM´s existence, which took place ten years ago, in the third quarter of 2004 to today: 1. Papers Published: Including the present edition were published 10 Volumes, 28 issues with 223 papers selected in the "blind review" process involving about 500 authors and over 120 national and international referees. 2. Globalization of JISTEM: The 223 articles published in JISTEM were submitted from 27 different countries besides Brazil, namely: Argentina, Australia, Austria, Bahrain, Canada, Chile, Colombia, Korea, Cuba, United Arab Emirates, Spain, Finland, France, Ghana, Greece, England, Jordan, Malaysia, Mexico, Pakistan, Portugal, Czech Republic, Turkey, Uruguay, USA and Venezuela. 3. Inclusion of JISTEM in Web of Knowledge – Thompson Reuters. Several factors contributed to this internationalization including: The publication in English, the pioneer implementation of DOI 5 years ago, the USP entry portal and the entry in SciELO Base. As announced by Thompson Reuters in: http://thomsonreuters.com/press-releases/102013/SciELOCollaboration, the entire SciELO Base is being included in the Web of Knowledge Base. As a result the entire JISTEM base of articles and its authors become highly visible and accessible through Web of Knowledge. JISTEM´s existence is possible because the full support from USP Portal, CNPq and CAPES, Brazilian institutions dedicated to foster Brazilian science development. As it can be read in this issue´s index the 9 articles reflect the quality and depth with which topics are presented and discussed in JISTEM B - 10th anniversary of CONTECSI - USP - International Conference on Information Systems and Technology Management Equally successful the CONTECSI present its 11th edition in 28, 29 and May 30, 2014, including side events of international importance as follows: 31 WCARS - USP WCARS World Continuous Auditing and Reporting Symposium, 2nd International Panel on eGovernment, 8th International Workshop of XBRL and the 1st Latin American ISACA Academic Advocates Meeting. As happens every year, the three best papers selected by the referees will be invited to submit their papers for publication to JISTEM. The event will take place at FEA/USP Sao Paulo, Brazil on days 28, 29 and 30 of May 2014. We count with the participation of all readers not just sending papers, but also the dissemination of CONTECSI to all interested. We remind that the deadline for paper submission has been extended to the 19th of January 2014. We wish everyone good reading JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013, pp. 461-462 www.jistem.fea.usp.br

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Riccio, E. L.

Editorial – 10 anos da JISTEM Edson Luiz Riccio, Editor

Prezados Leitores e Colaboradores Neste editorial, com o qual encerramos o ano de 2013 aproveitamos para lembrar a todos os nossos leitores e colaboradores sobre os fatos importantes que envolveram nossas atividades acadêmicas neste período: A - 10º aniversário da JISTEM – USP – Journal of Information Systems and Technology Management Com esta edição comemoramos os 10 anos da JISTEM uma revista que foi criada em 2004 juntamente com o CONTECSI – USP International Conference of Information Systems and Technology Management. Decidimos trazer à lembrança de todos alguns dados relevantes sobre a JISTEM desde a primeira edição, ocorrida há dez anos, no terceiro quadrimestre de 2004, até hoje: 1. Artigos Publicados: Incluindo a presente edição foram publicados 223 trabalhos selecionados em processo de “blind review” envolvendo cerca de 500 autores e mais de 120 pareceristas nacionais e internacionais. 2. Globalização da JISTEM: Os 223 artigos publicados na JISTEM procedem de 27 diferentes países, além do Brasil, a saber: Argentina, Austrália, Áustria, Bahrein, Canada, Chile, Colômbia, Coreia, Cuba, Emirados Árabes, Espanha, Finlândia, França, Gana, Grécia, Inglaterra, Jordânia, Malásia, México, Paquistão, Portugal, Republica Checa, Turquia, Uruguai, EUA e Venezuela. 3. Inclusão da JISTEM no Web of Knowledge – Thompson Reuters: Vários fatores contribuíram para essa internacionalização entre os quais: A publicação em inglês, a implementação pioneira do número DOI há 5 anos atrás, a entrada no Portal USP e a entrada na Base SciELO. Conforme anunciado pela Thompson Reuters em: http://thomsonreuters.com/pressreleases/102013/SciELO-Collaboration, toda a Base está sendo incluída no Web of Knowledge. Como resultado a inteira base de artigos da JISTEM e seus respectivos autores tornam-se altamente visíveis e os artigos acessáveis pelo Web of Knowledge. A existência da JISTEM é possível devido ao pleno apoio do Portal da USP, CNPq e CAPES, instituições brasileiras dedicadas ao desenvolvimento da ciência brasileira e mundial às quais agradecemos. A cada número fica notória a qualidade dos textos e a dedicação de toda a equipe editorial. Como se pode ver pelo índice desta edição os nove artigos espelham a qualidade e profundidade com as quais os temas são apresentados e discutidos pela JISTEM. B - 10º aniversário do CONTECSI - USP – International Conference on Information Systems and Technology Management Igualmente bem sucedido o CONTECSI apresentará em 28, 29 e 30 de maio de 2014 a sua 11º edição, incluindo eventos paralelos de importância internacional, a saber: 31º WCARS – USP World Continuous Auditing and Reporting Symposium; 2º International Panel on e-Government; 8º International Workshop of XBRL e o 1º ISACA Latin American Academic Advocates Meeting. Como ocorre todos os anos, os três melhores trabalhos selecionados pelos pareceristas serão convidados a submeterem seus artigos à JISTEM para publicação. O 11º CONTECSI ocorrerá na FEA/USP nos dias 28, 29 e 30 de Maio de 2014. Contamos com a participação de todos os leitores não apenas enviando trabalhos, mas também na divulgação a todos os interessados. Lembramos que a data final para submissão de trabalhos foi ampliada para o dia 19 de janeiro de 2014. Desejamos a todos boa leitura

JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013, pp. 461-462 www.jistem.fea.usp.br

JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp. 463-482 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300001

THE DEVELOPMENT OF VALUE SYSTEMS AND THE ROLE OF INFORMATION SYSTEMS IN THE PORTUGUESE INSURANCE INDUSTRY Bruno Alexandre Ribeiro Marques Catholic University of Portugal, iLIDH Institute, Lisbon, Portugal __________________________________________________________________________

ABSTRACT This study aims to analyze the status of partnerships between organizations in the Portuguese insurance industry and design a development strategy that includes the Information Systems (IS) dimension. In this paper, the current role of the IS in insurance partnerships (e.g.: automation of functionalities, alignment with decision makers) is analyzed, as well as their importance in the future. Since insurance information activities are knowledge intensive, a relational and learning approach was followed. The impact of the IS on collaboration and implications for the CIO (responsible for the IS) are presented. The existence of a good exploration of the IS for automation and integration of heterogeneous systems were verified. However, collaborative functionalities (e.g. Web 2.0) and partnership management indicators were not observed as a common practice. The CIO can be an agent of change, highlighting the IT Governance view and the socio-technical approach that are key to increase the maturity and value of the IS in the insurance industry. Keywords: Inter-organizational relationships; levels of collaboration; impacts on the Information Systems; IT Governance

INTRODUCTION

In 2005, the author concluded his Master’s thesis "Impact of the Internet on the Primary Activities of the Insurance Industry in Portugal" which focused on the internal value chain. His doctoral thesis, “Development of the Value Systems in the Portuguese Insurance Industry”, focused on an outside-in view that broadens the horizon of analysis to consider the inter-organizational space. This view integrates information technology management in a more holistic model where the competitiveness of the business is _____________________________________________________________________________________ Manuscript first received/Recebido em 29/06/2012 Manuscript accepted/Aprovado em: 09/07/2013 Address for correspondence / Endereço para correspondência Bruno Alexandre Ribeiro Marques, Catholic University of Portugal, Invited Professor, iLIDH Institute, Portugal, ResearcherPortugal Master in Business from Universidade Católica Portuguesa (UCP), MBA (UCP) and PhD from Universidade de Aveiro, He is currently member of the Technology Department and coordinator of IT Governance and Best Practices committee at Açoreana Seguros Insurance Company. He collaborates with universities as a professor in the fields of Information Systems, Knowledge Management and Change Management. He is also an investigator in the areas of Information Systems and Organizational Development. He was as a consultant role in the areas of Management and information systems in national and multinational companies. Address: Av. General Norton de Matos, nº 19 - 8º Dt – Miraflores. Algés.. Portugal Phone: +351966541595 Email: brmarq@clsbe.lisboa.ucp.pt; bruno.armarques@gmail.com Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

464 Marques, B. A. R.

directly related to the dynamics of the external relationships and subsequent level of collaboration between companies and their partners. The effective articulation between insurance management and information systems (IS) aims to recognize the informational needs of decision makers and introduce essential IT tools, collaborative processes and sharing culture, therefore increasing the value of information as a metaresource of management (Ward and Peppard, 2002). The Value Systems context, which is more integrated, emphasizes the relevance of a socio-technical approach in the IS implementation in the insurance industry. Therefore, the technological proposal should be framed in a broader sense of the business strategy and organizational maturity levels. 

The object of analysis

This study focuses on the value systems, the inter-organizational space where companies collaborate in order to offer high-valued services. In this context, we intended to study the current status of inter-organizational partnerships in the Portuguese insurance industry, understand the dynamics of its relationships, taking into account its competitiveness. Essentially there are three reasons for this:  Insurance companies adhere effortlessly to the value system concept. In fact, they can be conceptualized as a big hub making business connections among a full array of external organizations, being therefore fertile soil for innovation management.  The insurance industry has a pivotal role in Portuguese economy. In 2009, this industry represented 8.9% of the GDP and is an activity with a crucial role in the economy and consolidation of the social and economic progress.  Insurance is an information and knowledge-intensive activity (Porter and Millar, 85). The alignment between information and business is absolutely crucial, as well as the exploration of partnerships with a relationship and knowledge view, taking innovation and client-driven orientation into account. Specifically speaking, the value creation and competitiveness of insurance companies are intertwined with the quality of service of a large array of external organizations. 

Information, knowledge and network era

The technological development we see nowadays is the fastest in our history and is motivated by the scientific progress and convergence of communication, multimedia and information technologies. The availability of information, forerunner of knowledge, influences the works of society and economy with strong impacts on the corporate arena. The Network Society (Castells, 2002) is one of the most powerful metaphors about the new throb we see explaining the diffuse, super symbolic (Toffler and Toffler, 1995) and multifaceted reality in which we move. 

A new competitive dynamics

Nowadays, traditional business models are overcome by new forces of progress. These forces generate a high level of organizational transformation where operative inefficiencies and static views give way to new strengths and sources of competitive

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advantages and management principles (Lei and Scolum (2002); Senior (2000), Bartlett and Goshal (2001). In this new competitive dynamics, intangible factors are highlighted as the engine of economic development (Carneiro (2003), Davenport and Prusak (1997) and Magalhães (2005). Knowledge capital is currently a source of market differentiation and is comparable to the increase of importance of intangibles. This allows the learning process to renew the knowledge and the capacity of making it useful, and thus promoting it to the strategic realm. The inter-organizational context adheres to this new logic of collective intelligence since the intangible factors only have value if used and only multiply if they flow. 

Problem, Objective and Approach



Management Problem: Value creation in the insurance industry

The insurance industry context is highly competitive because of its complexity, high level of technicality, and high rate of change. Therefore, it brings about the search for better efficiencies, systematic adjustments to market conditions and sources of competitive differentiation. In this sense, with the value creation in the insurance industry in mind, the following management problems were identified: Management challenges  What strategic vision could be foreseen in the insurance industry considering the new competitive environment?  Which are the keys for competitive differentiation assuming that external openness, strategic collaboration and learning are new strategic strengths?  How to build, in a consistent manner, a strategy based on intangible resources – namely, information, innovation and knowledge?  In light of value systems principles, how to manage partners, relationships and processes, in order to create value and in an integrated way? Table 1 – Management challenges According to the context described, the response systems in the insurance industry, necessarily of variable geometry, should demonstrate the capacity to adapt and materialize opportunities through the development of an inter-organizational collaborative system. Therefore, we suggest that the race towards competitiveness in the insurance industry is also a race towards the development of value systems. 

General objectives

The research regarding the development of value systems in the insurance industry intended to analyze the relationships that insurance companies establish in order to create value. Consequently, it aims to contribute to improving the understanding of the dynamics associated with the creation of inter-organizational partnerships, with competitiveness in mind.

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466 Marques, B. A. R.



Specific objectives of IS Management in the insurance industry

For the purpose of this paper, it is important to provide the general aspects of the analysis, the "forest". The focus will be on the IS aspect, the "tree", and how it should be aligned with the evolution of relational networks in the insurance industry – “conceive the tree integrated in the forest”. Regarding the IS aspect in the framework of the development of value systems in the insurance industry, the following specific objectives were proposed: 

Verify the current role of the IS in partnerships;



Verify the level of management maturity of the IS in light of an integrated



Verify the impact of the IS on partnerships;



Verify the effect of the IS in the level of collaboration among partners.

model;

These four objectives comprise the core of this paper.  The approach to the inter-organizational networks in the insurance industry The more one recognizes that value creation is a result of activities performed in articulation with the exterior, the more the interest towards the inter-organizational space increases (Dyer and Singh, 1998). The new mental framework, which moves from productivity to relationships (Castells, 2002), requires a certain level of disruption. Nonetheless, the concept of relationship networks has been analyzed in many frameworks (Begnis, Pedrozo and Estivalete, 2008). In the case of the networks in the insurance industry, the approach taken by the motivation of relationships between peers in this industry comes first. The insurance product is immaterial, information and knowledge intensive. The challenge is to benefit the demand side, searching for a more effective relationship with the market. In this context, the motivation in this industry should be the development of internal competences, access to external specialized resources, operational flexibility and service innovation (Carvalho, 2002). These needs can be fulfilled through interactions with other economic agents, i.e., through the collaboration between peers. Our approach should therefore underline Innovation, Learning and Service. 

The value system in the insurance industry and information

In the insurance industry, the emphasis is on multi-relationships (Carvalho, 2002 and Cummins and Doherty, 2005), i.e., the interconnections between insurance companies and partners, reinforcing a value system centered in the Client and in a superior focus on services (Silveira, 2008). Information is a management meta-resource that accompanies the internal value chain and the external relationships in the strain of computerization or through the incorporation of knowledge for a more sophisticated commercial dynamics (Vanharanta and Breite, 2003). In summary, given the nature of the value activities and the “outside in” demands, relationship networks between peers will be seen as service innovation, learning and development of competences. Organizational environmental (dynamic adaptation to the exterior), relational and learning aspects converge in a multi-faceted

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perspective, enhancing the collaborative level of the value systems. Managers in the insurance industry should have an integrated and strategic perspective of partnership networks as to better explore the potential of information. The largest interdependence among economic agents reaches out to the strategic management of the IS, among other dimensions, supporting the processes that have a tendency towards collaboration, making current information available to decision makers and operative models more agile (Nooteboom, 2006). 

Methodology

Using the hypothetical-deductive method, an abstract systematization was taken and followed by real and concrete observation. The methodology was based on the following steps:  systems

Conceptual mastery of the topics, discerning the atomic properties of value

 Empirical /Field research: Validation of the propositions through data gathered from targeted questionnaires. To complement, face-to-face interviews were conducted with the target audience (see figure 1).

Figure 1 – Methodology for Empirical Verification The data analysis comprised a descriptive analysis and a hypothesis test to verify the influence (correlation) of the dimensions in the degree of collaboration in the industry. 

Proposed Analysis Model

The conceptualization of the analysis model planned to articulate the various highlighted domains. The objective of the strategic management in the value systems is to develop static efficiency (e.g. reduce transaction costs) and the dynamic effectiveness (e.g. promote innovation), according to Noteboom (2004), Junior (2007), Doz and Hamel (1998) and Lefaix-Durand, Poulin, Kozak and Beauregard (2005). Forged on an integrated perspective a group of dimensions emerged, such as:

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468 Marques, B. A. R.

Dimensions

Theoretical references

Brief Description

Structure

TCE Relational View

“Background”

Relational View Dynamic Capabilities

Structure influences governance types and the collaborative potential of the partnership; centrality level is a way to acquire external knowledge. Capability to select partners in an integrated way; external openness in a quest to acquire more knowledge; ex-ante evaluation of partners.

Formal Governance

TCE Relational View

Formal infrastructure and procedures as the basis for interaction between partners.

Social Governance

Knowledge Management Relational View

Knowledge management

Knowledge Management Relational View

Innovation

Dynamic Capabilities

Information Systems

Dynamic Capabilities Relational View

Dynamic Capabilities

Execution

Outcomes

Dynamic Capabilities

Relational View

Socialization and favorable psychological context as preconditions towards knowledge creation; investments in coordination methods to stretch partnerships’ learning potential. Access to external sources of knowledge; capacity to assimilate the role and internalize knowledge through operative routines. Continuous learning processes. Innovation as a symptom of learning and Client-orientation based on competences coordinated through the value system. Basis to the connectivity between heterogeneous systems; collaborative infrastructure. Flexibility and organizational qualities towards collaboration. Organizational catalysts and continuous learning. Human network (social ties) and an ethical climate through all functional levels. Experience, organizational memory, roles and responsibilities in order to execute/operate the inter-organizational processes and coordination methods.

TCE Performance report designed following Balance Scorecard’s four perspectives; Dynamic Collaboration Levels. Capabilities Table 2 – Dimensions and references (brief).

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The presented figure 2 allows the visualization of the GPS model proposed:

Figure 2 – GPS Analysis Model (Integrated Partnership Management Model for the Insurance Industry) (note: Author’s analysis). The GPS model proposed addresses the following main issues:  Incorporates the fundamentals of inter-organizational partnerships, introducing a new vision based on the economic, social and cognitive trinomial;  It is consistent with the various perspectives of network analysis: dyadic, intra-firm and network relationships;  Presents a system of relationships that include bidirectional flows and connections. 

Limitations of the stratified sample

Twenty questionnaires were collected and thirteen face-to-face complementary interviews were conducted. Therefore, it is pertinent to explain the limited quality of the data. Since the sample is not perfect, the immediate extrapolation of the data to the universe cannot be done in a definitive manner. However, from a stratification of the sample it was possible to involve insurance top managers representing approximately 74% of the “Non-Life” portfolio and over 50% of the “Life” portfolio. We argue that the referred limitation occurs from the nature of the phenomenon in analysis itself, specifically for the following reasons:  The analysis model requires a transversal vision of the activity at an executive level.

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470 Marques, B. A. R.

 The level of disruption of the concepts does not suggest the generalization of the questionnaires. 

Results

General Maturity of the Insurance Value System Each dimension of the proposed model of analysis (GPS) was expanded in categories and indicators, resulting in the questions of the inquiry. The answers were collected considering a maturity scale, as shown below, giving us a picture of the current collaborative practices in the insurance industry.

1,5

2,5

3,5

Best practice

Defined

Partially Defined / Ad hoc

Non existent

Figure 3 - Scale of levels of maturity. Maturity levels represent the degree of formality, stage and capacity to gather metrics and structure processes. In this context, we followed a continuous improvement orientation, considering IS as a service, which implies process definitions, organizational roles and measurable business objectives (IT Governance Institute, 2007, Galliers and Leidner, 2003). The maturity scale adapted from CMMI levels (IT Governance Institute, 2007; Smith, 2012) was the following: 

Best practice: processes are defined, measured, reviewed and optimized;



Defined: processes are defined, normalized and have metrics;

 Partially Defined / Ad hoc: processes are partially documented, executed but in a general way; 

Nonexistent: processes are not executed.

In summary, considering the data collected, it was possible to visualize the current maturity level of collaboration in the insurance sector

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Figure 4 – Overall Maturity Level of Insurance Value System and its components. 

General understanding of the Scale of Dimensions of Maturity

The overall data of the as-is maturity level of each dimension gives us a big picture of collaborative practices in the insurance industry. Following, theten keyissues to retain are:  The general collaborative level is currently at an intermediate point (2.56). It could be in the path towards a “Best Practice” but it also could slip to an “Adhoc/Partial” level.  The relevance of each dimension was highlighted, proving the multidisciplinary nature of business partnerships and the need for a holistic management model. Currently, the domains with high levels of maturity are the more formal and structured ones. On the other hand, Innovation and Dynamic Capabilities, soft issues, are in lower stages.  The value system seems to be more economic-intensive (economic factors are more valued) rather than knowledge-intensive (innovation and collective learning factors are less observed in the collaborative space). This translates into a more transactional and less collaborative framework.  Complementarity (having several partners with weak ties) is more valued than Proximity between business partners (having strong ties with fewer entities with a resilient trust).  The optimal cognitive distance could be at stake. One issue to further investigate is if the current level of trust, merely in a rational basis, and an insufficient level of commitment are blocking the potential of collaborative processes.  The current coordination methods are limiting the potential of partnerships as social governance is neglected and it is well known that socialization is a precondition for learning.

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 The objective of incremental innovation and the nature of the business suggest Strength of Strong Ties as model of interaction. As this approach is not yet fully implemented, there is a strategic gap regarding the as-is model of collaboration in the sector.  Alongside the gap regarding external openness, endogenous factors should be improved as the internal network conditions the external network outcome.  There is a high level of formality in Business Partnerships that stress a transactional view of the collaboration. Although there is some appreciation of relational capabilities, this is not yet the standard. Nonetheless, these types of capabilities will have a high impact on the future, as the inquiries show.  The key is how to expand the more critical and less mature dimensions towards a better management of business partnerships in the near future.  View of the role of Information Systems in the management of partnerships The model of analysis proposed considers Information Systems (IS) as a required dimension. Although needed, it is not sufficient and insights about this crucial dimension are relevant for partnerships’ effectiveness. We will show in detail the analysis of the role of IS in business partnerships. 

Insight #1 The Overall role of IS in Partnerships.

83% of the respondents highlighted the critical role of IS and only 17% partially value the IS in partnerships. None of the respondents mentioned IS as a non-important dimension.

Figure 5 – Characterization of the overall importance of IS. 

Insight #2. IS maturity level

In general, the IS maturity level is “2.66” corresponding to the second half of the “2. Defined” Level. This is a relatively low level considering the current technological era and a context of information-intensive activities in insurance business. However, it was possible to distinguish two different realities and IS usage levels. The use of IS in the automation of processes (Galliers and Leidner, 2003) and in the interface of the information between partners, specifically through portals, is a broadly disseminated practice. In fact, IS at an operational level is well achieved, namely, data exchange and integration between back offices, guaranteeing the non-redundancy and timely management of data. The web based communication options between heterogeneous IS

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seems to be guaranteed. But the introduction of the IS with another type of range is somewhat limited in this stage. In fact, based on the transactional data mentioned, it is possible to reach analytical insights, such as real time business indicators, giving managers the opportunity to make decisions in a timely manner – with gains in effectiveness (Ward and Peppard, 2003; Austin, Nolan and O´Donnel, 2009). The development of collaborative 2.0 platforms (MacAffe, 2006) is another issue with high potential and not yet fully explored, particularly in a context where the frequency of interactions would benefit from communication, collaboration and knowledge management tools. 

Details about IS maturity level IS Dimension

Average

Topics Executive information systems (EIS)

3.11

Web 2.0 (collaborative functionalities)

3.79

Knowledge management systems

3.21

Workflow

2.16

Portals

2.11

Training and teamwork

2.00

Strategy

2.42

∑ Information Systems

2.66

Figure 6 – Components of IS Maturity Levels The analysis of the observations above is based on the three different levels of IS impact (Laudon and Laudon, 2009):

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 Operational Level [2.11 of maturity]: the joint reading of Extranet Portals and Workflows allows us to identify good performance in managing transactional data.  Management and Executive Levels [3.11 of maturity]: there is room for improvement concerning the management of information at an intermediate level, comprising business indicators and decision support in selection of potential partners – currently there is a maturity gap.  Knowledge Management and Collaboration [3.5 of maturity]: Collaborative tools with semi-structured information, connecting both operational and management levels in real-time are high potential systems yet to be deployed. According to this rating, it is possible to get some new insights from this dimension:

SI – Types of IS at Partnerships

Topics

Average

KMS and Collaborative Systems

3.50

Management and Executive levels

3.11

Operational level

2.11

∑ Information Systems

2.66

Figure 7 – IS types and impact on Partnerships. Regarding the existing gap in Management and Executive Levels, question P4.3.8 “Are there business indicators about partnerships, contact lists (yellow pages), partnership performance, etc.?”, over 50% of the respondents answered that they get this type of information only partially and almost 15% stated that they do not get it at all. Insights about decision support systems for Partnerships were asked in question P4.3.9 “Is there a mechanism for decision support in the selection process of partners?” and 58% of the respondents answered negatively. Regarding the Knowledge Management and Collaborative Systems, the gap was observed through question P4.3.7 “Do you have IS to support Knowledge Management among Partnerships, namely,Databases of best practices, document sharing, information sharing, etc.?” Only 10% answered positively and from the remaining 90%, almost 60% stated they have this information only partially and 32% stated they did not have these functionalities at all.The question about Web 2.0 collaborative tools got the smallest proportion of

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positive answers. Almost 80% of respondents stated that they had not implemented any of these functionalities. In general terms, the above IS maturity stage in the insurance industry seems to follow the classic pattern of IS evolution in organizations, i.e., progressing from transactional systems at an operational level to internal integration and superior management levels, with the need of less structured information. This behavior implies an improvement of the strategic alignment and a business-driven IT management model to overcome this gap. On one hand, IS are already fully implemented at an operational level granting internal rationalization (Venkatramen, 94; Galliers and Leidner, 2003). On the other hand, impact at business network redesign level is not yet explored. Therefore, there is room for improvement concerning the IS management model: from the existing hard technological perspective to a more business-driven orientation, implementing soft issues such as collaborative functionalities, change management and business alignment, as well as a clear vision of maturity levels in light of IS best practices. ď&#x201A;ˇ

Insight #3. ISâ&#x20AC;&#x2122;s future role

Firstly, we will present the overall expected roles of all the dimension of analysis, comparing the as-is values vs. their future impact on partnerships.

Figure 8 â&#x20AC;&#x201C; Current and future Impact on partnerships of the dimensions of analysis. From the graph above, the multi-dimensional nature of business partnerships can be clearly observed, confirming the need for a holistic business model. All the dimensions of analysis were referred to as important to conduct the current management of partnerships and in the future these practices will be valued even higher. In the present, a more formal/legal perspective of partnerships seems to be widespread; accordingly, IS to support this type of relations are being deployed. The role of Social Governance and Background (research and evaluation of potential partners) are also mentioned. The current level of Execution was valued at a lower level than expected.

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Still regarding the current impact of the dimensions of analysis, in general, soft issues have less relevance. In fact, Knowledge Management, Innovation and Dynamic Capabilities are less valued in the present, being high potential issues to explore in this context. In the future, a more homogenous appreciation of the dimensions of analysis is projected, aiming a superior collaborative level among peers. The future collaborative stage also stresses the importance of formal and social governance, now equidistant, and Execution is being pushed forward. Concerning the impact of IS in the present, its’ importance is already recognized as being instrumental for business partnerships and valued as the most important dimension. This impressive fact is expected to continue in the future stage of partnerships, as IS are referred as a key-issue. However, hard components of IS (ex: partnerships indicators) and soft components (ex: collaborative functionalities) are projected to have more weight. 

Insight #4. IS impact and collaborative levels

Through inductive data analysis a correlation test between the dimensions of our model was performed. Using SPPS software, a dependent variable was fixed (“collaboration level”) and in light of our hypothesis, the positive effects of each dimension were tested. For the purpose of this paper, we will only mention the positive correlation observed between the IS dimension and the level of collaboration and maturity between partners. 

Conclusions



Strategic direction: “development”

From what has been stated, it is possible to systematize a set of opportunities that would enhance inter-organizational relationships. In the insurance industry, business partnerships are an opportunity to develop strategically, towards a more differentiated value proposal, supported by a proper alignment between insurance companies and specialized business partners.

Figure 9 – SWOT analysis of insurance partnerships (Brief). 

General challenges of collaboration

This strategic direction reflects a change of perspective, generating a new mental model of greater service orientation, learning and engagement of strong ties with preferred partners. Since every future has a past, we will summarize the fundamental

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aspects of today’s collaboration stage and the major challenges towards a more mature partnership management in the insurance industry.  Partnerships are not yet being used as a way to adapt to market conditions and mitigate strategic drift risk.  Partnerships are not being managed in light of Knowledge Management and Innovation to obtain differentiation in the market.  There is not enough effort to transfer tacit knowledge between partners and there is some resistance to external openness.  Business partnerships are being managed by stressing formal issues rather than using a global and broader strategy of development.  A set of sophisticated competences of business partners is already available, increasing the potential outcome of inter-organizational partnerships.  The definition of expectations between entities, through the complete life cycle, is blocking the partnership’s outcome.  The companies’ current mental model calls for command-control management systems, not suitable to a more collaborative business model.  The current Social Governance level is not adequate with the expectation of Knowledge creation, considering the ambition to develop partnerships with a more collaborative weight.  Strong ties vs. Diversity (of partners) should be balanced in order to achieve an optimal cognitive distance. Relational Risk should be mitigated through the reinforcement of ties.  Internal and external networks should be aligned. Insufficient absorptive capacity (internally) could block more collaborative relationships (externally).  The role of the IS is highlighted in the present and in the future. However, a change in the management role of the technological offer is required, combining hard and soft capabilities. Therefore, a new IS management model could be foreseen. 

Specific IS challenges

In summary, the specific IS challenges are the following: Challenge #1: Insurance IS follow the traditional path: more maturity at an operational level with consolidated transactional systems and general usage of Portals, but less maturity in exploration of executive information and insufficient deployment of collaborative functionalities. It was shown that transactional systems and Portals are used broadly and in an effective way. Based on these external platforms, business partners (Agents, Service Providers, etc.) perform several tasks and share operational information (policy emissions, claims opening, quotation, financial statements consulting, etc.). The connection between heterogeneous systems is commonplace. However, analytical data exploration and executive indicators about Partnerships still have room for improvement. Moreover, collaborative functionalities are not implemented effectively.

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Business Relationship Redesign is a level of change that has not yet been achieved and it is a high potential area to explore. Challenge #2: More collaborative partnerships require efficient technological platforms and a more demanding management of information. PRM concept (Partners relationship management) has not yet been explored in the insurance industry. Business partnerships need technological platforms. Moreover, more intense and collaborative relationships will pressure for information sharing, real-time campaign management, communities of interest and other applications, towards high interactive models. Challenge #3: The introduction of Collaborative IS is a high potential area; the current maturity levels create the basis to evolve to more sophisticated stages. Collaborative business communities could be enhanced through collaborative functionalities, interactivity and information richness. Discussion forums, collaborative project management, shared agenda and videos, shared information archives, wikis, etc. are examples of 2.0 functionalities that could be deployed pushing partnerships forward. Partnerships are strategic options, which address efficiency, effectiveness and competitiveness. Even though these are traits that the insurance industry constantly searches, they are not neutral to current business models; therefore, there is a need for a roadmap towards change and implementation of more mature business partnerships. 

A new collaborative architecture for the insurance industry:

The insights of maturity levels in insurance partnerships allow us to reflect about the current management model and could be the preparatory ground to push forward collaborative relationships. Nevertheless, to undertake the challenges of a collaborativedriven partner management, a holistic mental model and integrated business architecture are required. Summarizing, the development of insurance value systems include: 

A new vision



A new strategy



A new collaborative approach



A new management model



Positioning of the insurance information manager

1. A more relational, dynamic and collaborative business model, based on learning, with sturdy relationships and in light of strong ties, will impact the management of Information Systems. The information manager's strategic contribution will start with the knowledge of the inter-organizational chart, the opportunities and risks they represent for the business. Being an agent of change will be his/her primary role, positioned as an ally of top management in order to push business partnerships forward. 2. On the tactical level, the non-exclusive view of technology stands out. The information manager should be able to go further, with a key role in the company’s JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 463-482

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transversal processes. In line with the socio-technical fundamentals of IS, the development of collaborative practices requires an alignment of Organization Management Technology. The CIOâ&#x20AC;&#x2122;s contribution is inter-dependent and not neutral to other areas of management. Thus, the information manager should have business competences to support functional managers in the design of more collaborative processes. The maturity of the organization can only be developed together. 3. On an operational level, technological gaps were identified, namely, the implementation of collaborative functionalities (e.g.: Web 2.0, internal or external) and deployment of analytical information (e.g.: Partner profitability indicators). These collaborative functionalities impact and should be preceded by internal communication and collaboration model (AIP, 2010). In this view, even the operational tasks in IT departments require a CIO with a relational-oriented profile. ď&#x201A;ˇ

Implications for Information management in the insurance industry

To build bridges between the business demand and the technological offer, we will use a matrix adapted from Olave and Neto (2001), stressing how CIOs should adapt and develop their competences. Capability

Culture of Trust

Culture of Competences

Culture of Technology

Status measured in the Portuguese insurance industry

Implications for the CIO

The CIO should have good Insufficient level for superior interrelationship capabilities and a stages of collaboration culture of openness â&#x20AC;&#x201C; behavior A resilient level of trust is generates behavior needed

Complementary competences from Partners are recognized and valued

Portfolio IT Management would allow the CIO to focus on strategic information systems, namely, collaborative systems

The CIO should be aware of the potential of Web 2.0 and PRM Systems. Partnership performance indicators, Portfolio Partnerships Management and Business Intelligence could be Gap at the management level applied to Partners Management. The (analytical tools) and CIO can be an agent of change in this regarding collaborative strategic domain functionalities At an operational level there is a generalized usage of Portals and transactional systems

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Cognitive Culture

External Sources of knowledge (Current Partners)

CIOs should have credibility to be in the first line of innovative projects considering Partners Management

IT management best practices (ex: Insufficient vision of COBIT) would permit productivity Partnerships in light of gains, allowing focusing resources on Knowledge Management high-value projects theory and practice Table 2 – Summary of critical capability for the collaboration and impact of the information manager.

Finally, based on our findings, there seems to be a new challenge in insurance management. There is also a strategic gap in the management of partnerships in the insurance industry. An outside-in positioning requires a shift towards a more collaborative-orientated approach stressing the Strength of Strong Ties as the model of interaction for superior collaborative outcomes. Based on an integrated framework, the information manager can be an agent of change, aligned with top management. There is room for improvement in Information Systems Management, namely with the implementation of 2.0 functionalities, more collaborative tools and knowledge support systems and analytics. It is important to remember the relevance of the insurance industry in Portugal, representing almost 9% of the GDP and with an important role in the social-economic progress. It was possible to understand the inter-organizational space where the CIO can strengthen his strategic contribution according to the collaborative needs of a more dynamic partnership system. Information management should realize the value of information as a meta-resource of management, being that this study designs a model of interaction that would deepen the engagement of economic agents in the industry, conducive to value creation in a more competitive business environment. Thus, the reinforcement of the role of IS in collaborative models is a new field with opportunities that CIOs, consultants and Universities cannot ignore. This is an opportunity that, aligned with business needs of differentiation, creates value and calls for collaborative action. REFERENCES AIP (2010). Estudo Aprendizagem informal e utilização das TIC nas PME portuguesas. Associação Industrial Portuguesa – Confederação Empresarial. Austin, R., Nolan, R. and O´Donnell, S. (2009). Harvard Business Press. Porter, M.E. and Millar, V.E. (1985). How information gives you competitive advantage. Harvard Business Review. Bartlett, C. and Gohsal, S. (1999). The Individualized Corporation: A Fundamentally New Approach to Management. Harper Business Book. Begnis, H.S.M, Pedrozo, E.A., Estivalete, V.F.B. (2008). Cooperação como estratégia segundo diferentes perspectivas teóricas. Revista de Ciência e Administração. 10 (21), 97-121.

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Carvalho, R. (2002). Seguro 2000. APS (Associação Portuguesa de Seguradores), Portugal. Castells, M. (2002). A Era da Informação: Economia, Sociedade e Cultura – Volume I: A Sociedade em Rede. Fundação Calouste Gulbenkian. Cummins, D. and Doherty,N. (2005). J. David Cummins. The economics of insurance intermediaries. American Insurance Association. Davenport, T.H. and Prusak, L. (1997). Information ecology: mastering the information and knowledge environment. New York: Oxford University Press Dyer, J. and Singh, H. (1998). The relational view: cooperative strategy and sources of interorganizational competitive advantage. Academy of management review. 23 (4), 660-679. Doz. Y. and Hamel, G. (1998). Alliance Advantage: The Art of Creating Value Through Partnering. Harvard Business Review Press. Júnior, A. (2007). A Empresa em Rede: Desenvolvendo Competências Organizacionais. Campus. Galliers, R. and Leidner, D. (2003). Strategic Information Management. Butterworth Heinemann. IT Governance Institute (2007). COBIT 4.1. Consultado em Julho de 2010 em Universidade Católica: http://www.isaca.org Laudon, K. and Laudon, J. (2009). Management Information Systems – Managing the Digital Firm. Pearson Prentice Hall. Lei, D. e Scolum Jr.. (2002). Organization designs to renew competitive advantage. Organizational Dynamics, 31 (1), 1-18. Lefaix-Durand, A., Poulin, D., Kozak, R. and Beauregard,R. (2005). Interfirm relationships and value creation: a synthesis, conceptual model and implications for future research. Network Organization Technology Research Center (Centor). McAfee, A. (2006). Enterprise 2.0: The Dawn of emergent collaboration. Sloan Management Review, Spring 2006, 47 (3), 21-28. Magalhães, R. (2005). Fundamentos da Gestão do Conhecimento Organizacional. Lisboa, Edições Sílabo. Nooteboom, B. (2004), Inter-Firm Collaboration, Learning and Networks: An Integrated Approach. Routledge Publication. Olave, M. and Neto, J. (2001). Redes de Cooperação Produtiva: Uma estratégia de competitividade e sobrevivência para Pequenas e Médias Empresas. GESTÃO & PRODUÇÃO, 8 (3), 289-303. Silveira, M. (2008). A Qualidade de Serviço dos Seguros - Do Modelo Tradicional ao Ambiente Digital. Editora Principia. Smith, A. (2012). Fundamentals of the Capability Maturity Model. Consultado em Setembro de 2012 em Universidade Católica: http://www.tdan.com/view-articles/5196/ Toffler, A. and Toffler, H. (1995). Criando uma nova civilização. Lisboa: Livros do Brasil.

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Vanharanta, H. & Breite, R. (2003). A supply and value chain management methodology for the Internet environment. Consultado em Julho de 2010 em Universidade CatĂłlica: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.199.6667&rep=rep1 &type=pdf Venkatramen, N. (1994). IT-enabled business transformation: from automation to business scope transformation. Sloan management review, 35 (2); 73 â&#x20AC;&#x201C; 87. Ward, J. Peppard, J. (2002). Strategic Planning for Information Systems. Ed. 3 Wiley Series in Information Systems, England.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.483-502 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300002

THE ROLE OF WORKER TENURE AND EMPLOYMENT HETEROGENEITY ON SOFTWARE DEVELOPMENT WORK ACTIVITIES Jeff Crawford Lipscomb University, Nashville, Tennessee, USA Lori N. K. Leonard The University of Tulsa, Tulsa, Oklahoma, USA Kiku Jones Quinnipiac University, Hamden, Connecticut, USA __________________________________________________________________________

ABSTRACT Software development group effectiveness depends on many factors, and understanding those factors is vital to project success, especially when considering the time and money that is dedicated to said projects. Therefore, this study examines the role of worker tenure and employment heterogeneity on exploration and exploitation work completed within an organization’s software development group. Analysis of time tracking data within one financial services organization over a three years period demonstrates that worker tenure and employment heterogeneity do play an important role in shaping work activities. Worker tenure exhibited a negative relationship with exploration and exploitation activities, suggesting a critical mechanism through which an organization can elicit innovative and incremental development efforts. Further, the positive effect of employment heterogeneity on exploration and exploitation suggests that employment diversity can also provide a means to encourage innovative and incremental development activities. Findings highlight the notion that group composition plays a meaningful role in shaping the focus of software development work within an organization. Keywords: software development, exploration, exploitation, worker tenure, employment heterogeneity _____________________________________________________________________________________ Manuscript first received/Recebido em 28/08/2012 Manuscript accepted/Aprovado em: 07/10/2013 Address for correspondence / Endereço para correspondência Jeff Crawford, PhD, PMP, Lipscomb University One University Park Drive Nashville, TN 37204 (615) 966-5042 (615) 966-1546 Jeff Crawford is the Director of Graduate Programs and an Associate Professor in the School of Computing & Informatics at Lipscomb University. He holds a Ph.D. in Management Information Systems from The University of Oklahoma and a M.S. in Telecommunications Management from Oklahoma State University E-mail: jeff.crawford@lipscomb.edu Lori N. K. Leonard, PhD, The University of Tulsa 800 S. Tucker Ave. Tulsa, OK 74104 (918) 631-2787 (918) 6312164 Lori N. K. Leonard is a Collins Professor of Management Information Systems at the University of Tulsa. Dr. Leonard received her PhD from the University of Arkansas and is a member of the Association for Information Systems and the Decision Sciences Institute. Her research interests include electronic commerce, ethics in computing, C2C commerce, and online trust E-mail: Lori-leonard@utulsa.edu Kiku Jones, PhD, Quinnipiac University 275 Mount Carmel Avenue Hamden, CT 06518 (203) 582-5040 Kiku Jones is an Assistant Professor of Computer Information Systems at Quinnipiac University. She received her PhD from the University of Kentucky. Her research interests include knowledge management, electronic commerce, C2C commerce, and IS strategy. E-mail: kiku.jones@quinnipiac.edu Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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INTRODUCTION

Research on software development has a rich history, often with a focus on issues such as development methodologies (Lindstrom & Jeffries, 2004), project management practices (Verner & Evanco, 2005), design patterns and organizational outcomes (Gopal, Krishnan, Mukhopadhyay, & Goldenson, 2002). Technical and procedural issues certainly play an important role in shaping the effectiveness of a software development group, but productivity is also largely impacted by dynamics within the group. For example, software development team outcomes can be influenced over time by how well expertise is coordinated (Faraj & Sproull, 2000), the interplay among different personalities (Hannay, Arisholm, Engvik, & Sjøberg, 2010), and/or the presence of social rewards (Roberts, Il-Horn, & Slaughter, 2006). While researchers have examined the impact of group dynamics on software developer activities, issues such as group composition remain understudied and deserve greater attention (Moreland, Hogg, & Hains, 1994). Software provides an important mechanism for organizations to rapidly apply knowledge within key strategic and operational processes. An organization’s software development function allows the firm to exploit extant knowledge through incremental changes to existing systems (e.g., maintenance & support activities) while also enabling the exploration of new avenues for action through the creation of new systems (e.g., new software project initiatives). When operating well, an organization’s software development function can provide the digital options necessary to achieve long term success in the marketplace (Sambamurthy, Bharadwaj, & Grover, 2003). In contrast, an ineffective software development function can hamper the development and utilization of organizational knowledge and prevent timely responses to market changes (Lyytinen & Robey, 1999). The purpose of this study is to further the understanding of software development group work by examining the influence of worker tenure and employment heterogeneity on exploration and exploitation activities completed within an organization’s software development group. This research adds to literature on software development group effectiveness by examining how group composition influences the nature of development work undertaken. We draw on both group development and management theories to examine the relationship between software development group composition and exploration- and exploitation-related work activities. The paper begins by drawing on literature from group development and management domains to clarify the impacts of group composition on exploration and exploitation activities. Data from a financial services firm is analyzed with regards to stated hypotheses and findings are discussed. The paper concludes by acknowledging research implications, limitations and future directions. 2. DEVELOPMENT OF THE RESEARCH MODEL As a means of addressing the occurrence of exploration and exploitation activities over time, this study focuses on two varying characteristics of an organization’s IT human resource: worker tenure and employment heterogeneity. IT

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workers often possess a skill that is not constrained to specific organizations or industries, impacting their stability or longevity within an organization. Further, organizations often utilize both employee and contract software developers, a mix that can fluctuate over time. Both worker tenure and employment heterogeneity have an immediate and direct impact on the level of exploration and exploitation activities undertaken within an IT group. As a means of clarifying factors that shape work activities, the following sections examine the impact of changes in worker tenure and employment heterogeneity over time. The proposed research model is pictured in Figure 1 and detailed in the following paragraphs.

a Solid lines represent relationships hypothesized to be positive while dashed lines represent relationships hypothesized to be negative.

Figure 1. Proposed Research Modela The Role of Worker Tenure on Work Activity Turnover of IT personnel is a legitimate concern for modern organizations (Hacker, 2003), especially within those that employ IT workers in a support function (Ang & Slaughter, 2004). Worker tenure, which describes how long a worker has been with the organization, has specific implications on the work activities undertaken within an organizational group. For example, research has shown that member turnover within a group often has a negative impact on learning processes, which directly hinders team effectiveness (van der Vegt, Bunderson, & Kuipers, 2010). Further, turnover has been found to disrupt established routines that are necessary for effective team operations (Zellmer-Bruhn, 2003). The following sections theorize regarding the impact that worker tenure will have on exploration and exploitation activities within a software development group. First, we consider the potential impact of changes in worker tenure on exploration activities, represented by ‘new project’ work being undertaken by the software developers. Exploration activities demand high levels of specialization. As tenure increases, workers identify more closely with the team and are more likely to conform to institutionally acceptable ways of doing business. Specifically, “old timers, on average, know more, but what they know is redundant with knowledge already reflected in the code…they are less likely to contribute new knowledge on the margin” (March, 1991, p. 79). While some level of conformity is important for enabling coordination and establishing credibility within a group, it can adversely impact specialization in numerous ways. For example, as group tenure increases, members often become less likely to modify their work specializations (Lewis, Belliveau, Herndon, & Keller, 2007). Rather than focusing on innovating, members draw on

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previous group experiences and drift towards working in ways they have in the past. Further, members will utilize past experiences to infer expectations about how other members will work (Lewis et al., 2007). Routines become established, and members become less likely to deviate from them. Specifically, “if accepted behaviors and belief systems become institutionalized, innovation will become stifled, because tacit social pressures may prevent individuals from deviating from established procedures and practices” (Dess & Shaw, 2001, p. 454). In these cases, specialization becomes less evident and its benefits are reduced within the group. Reductions in employee tenure can encourage exploration activities within the group. The exit of group members can result in a loss of critical business knowledge, especially tacit knowledge that is very difficult to transfer between individuals in a group (Szulanski, 1996). However, this loss of knowledge can actually encourage a redefinition of work routines and processes (Kane, Argote, & Levine, 2005; ZellmerBruhn, 2003). Further, the addition of new members can complicate coordination and credibility within the group, hampering each member’s ability to locate and validate specialized knowledge within the group (Kane et al., 2005). A less coordinated knowledge structure forces external knowledge searches that can introduce novel problem solving approaches. Adding new members is also an important means of increasing the specialization within a group, and has been shown to be important in encouraging innovation (Choi & Thompson, 2005). Taken together, these assertions suggest a negative relationship between worker tenure and ‘new project’ work activities. H1:

Worker tenure within a software development group will have a negative impact on the amount of ‘new project’ work undertaken.

Worker tenure is an important indicator of the experience and knowledge an individual has with regards to the norms, processes and structures of the organization. For most workers, increases in organizational tenure encourages a stronger identity with the organization itself (George & Chattopadhyay, 2005). Even with temporary workers, commitment to the client organization is a frequent consequence as tenure increases (Koene & Riemsdijk, 2005). Organizational identity and commitment is especially critical within a software development group since developer participation has been shown to be a function of the degree of social identity and situated learning (Fang & Neufeld, 2009). When group members become more accustomed to each other, they are more likely to move past surface level differences in order to focus on task requirements (Harrison, Price, Gavin, & Florey, 2002). Because expectations of member behavior become clearer over time, trust and stability grow as group members continue to interact (Williams, 2001), allowing members to evaluate each other primarily on the basis of expertise and competence (Rulke & Rau, 2000). As a result, coordination and perceived credibility are allowed to blossom as group tenure increases. The flow of knowledge within the group, then, is smoothed so that it can be applied to meet existing needs. Software developers are more likely to undertake exploitation activities, represented by maintenance & support activities, because their ability to tie organizational needs to specialized knowledge will increase over time. In contrast, decreases in worker tenure through the exit or entry of workers in the group will cause a disruption in group coordination and credibility perceptions. Changes in team composition can create procedural ambiguities and potentially harm perceptions of psychological safety (van der Vegt et al., 2010). Further, changes to JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 483-502

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team structure can impede an individual’s ability to locate and utilize specialized knowledge within the group (Rico, Sánchez-Manzanares, Gil, & Gibson, 2008). While valuable knowledge may exist within the team, problems of coordination and credibility minimize the opportunity for members to use that knowledge to address existing needs. These assertions lead to the next hypothesis: H2:

Worker tenure within a software development group will have a positive impact on the amount of maintenance & support work undertaken.

While worker tenure plays an important role in the type of work completed by software developers, employment heterogeneity is also expected to influence the work undertaken by a software development group. The Role of Employment Heterogeneity on Work Activity Organizations frequently employ a mix of employees and contract workers within their software development group (Ang & Slaughter, 2001). Contract workers are utilized for a number of reasons, including obtaining specialized knowledge, fulfilling short term resource needs, reducing the fixed costs associated with internal labor, and enabling overall resource flexibility (Connelly & Gallagher, 2004). In a software development context, contract workers are often used as a means of gaining specialized knowledge that is not available within the client organization (Ang & Slaughter, 2001), such as that demanded by a new programming environment, technology innovation, or business process. Utilizing software developers from outside the organization provides a critical means of exploring new technological opportunities for the organization (Matusik & Heeley, 2005). Research is clear that heterogeneity in employment arrangements has specific consequences on worker attitudes, turnover, and intra-group information sharing (Broschak & Davis-Blake, 2006). The employment heterogeneity of a software development group, then, must be considered in terms of its impact on exploration and exploitation activities undertaken by development workers. First, employment heterogeneity has specific implications for exploration activities. At the group level, diversity has been shown as an important factor that shapes overall idea creation and quality (Cady & Valentine, 1999). Research has demonstrated that cognitive differentiation within a group has a direct impact on creative, or innovative, behavior (Horwitz & Horwitz, 2007; Janssen & Huang, 2008). The diversity afforded by a heterogeneous work group allows the group to recombine old knowledge into new, innovative knowledge (Wiersma, 2007). With regards to heterogeneity of work arrangements, the use of contract workers often results in a flow of specialized knowledge that allows for experimentation and exploration of new opportunities (Cardon, 2003; Connelly & Gallagher, 2004). Further, group homogeneity allows institutional pressures to surface and permeate that can impede exploration activities. Similarities within the group reduce communication inhibitors and “predispose [team members] to select, codify, and retrieve information in a like manner” (Rico et al., 2008, p. 171). Through homogenization, the group is encouraged to view the world through a similar lens and operate within institutionally acceptable ranges (Rentsch & Klimoski, 2001). As a result, innovative thinking and behavior is expected to be less evident as employment heterogeneity decreases. This leads to the third hypothesis:

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H3:

Employment heterogeneity within a software development group will have a positive impact on the amount of ‘new project’ work undertaken.

As employment heterogeneity grows, it is expected that exploitation activities will decrease. Increasing the heterogeneity of employment arrangements within a group has been shown to strain team relations and, consequently, coordination capabilities (Broschak & Davis-Blake, 2006). Employment concerns can often hamper the trust between employees and contract workers, reducing a general desire to share information and socialize (Connelly & Gallagher, 2004). Further, employment heterogeneity can produce harmful conflict within and beyond the group (Davis-Blake, Broschak, & George, 2003). Increased heterogeneity also impacts perceptions of credibility within the group. Specifically, “while contingent workers’ knowledge may be valuable, it is not necessarily valued” (Connelly & Gallagher, 2004, p. 972). In contrast, reductions in employment heterogeneity can act to smooth coordination and credibility necessary for exploitation to occur. Homogenization within the group encourages acceptance of institutionalized beliefs and perspectives (Mathieu, Heffner, Goodwin, Salas, & Cannon-Bowers, 2000), producing synergies necessary for exploitation to occur. Member similarities reduce opportunities for misunderstanding and friction; “team members anticipate the actions and needs of their colleagues and task demands and dynamically adjust their own behavior accordingly, without having to communicate directly with each other or plan the activity” (Rico et al., 2008, p. 164). These arguments lead to the final hypothesis: H4:

Employment heterogeneity within a software development group will have a negative impact on the amount of maintenance & support work undertaken.

3. METHOD Data To investigate the impact of worker tenure and employment heterogeneity on exploration and exploitation activities, software development project information for the years 2005 through 2007 was collected from an U.S.-based financial services organization. With yearly assets exceeding $9 billion and net income in excess of $200 million during this time, the firm was considered a top performer among peer institutions. This particular organization utilized an internal IT group dedicated to developing, implementing, customizing, and maintaining business software (hereafter discussed as the software development group). The software development group employed between seven and fifteen workers during this period and varied its use of contract workers over time based on project demands (between 0% and 53.3% of the software development team). During this three year period, all software project work was managed by employees of the organization. The organization provided access to a database containing all software development worker time tracking information during this time period. Within this particular organization, employee and contract software developers were required to electronically document the nature and duration of their work activities on a daily basis, assigning each activity to a specific organizational project. Projects were defined for all software development work within the organization, including new software development initiatives, maintenance & support work, operational activities and personal time (including professional development, sick and vacation time).

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Management expected each software developer, whether employee or contract worker, to document all working time for each working day as a means of internally billing work performed to business units within the organization. In order to properly analyze data, time tracking data were aggregated into work weeks. Weeks were coded using the ISO week date system, as specified in the ISO 8601 date and time international standard (International Organization for Standardization, 2004). Because this leads to occasions where there are 53 weeks identified in a year, and weeks 1 and 53 can represent less than a full work week, week 1 of 2005 and week 53 of 2007 were removed to ensure that all weeks analyzed included a full week of data. This resulted in 156 weeks of usable data for the analyses. Dependent Variables Outcome variables utilized in this study address exploration and exploitation activities within the organization, expressed through actual work completed by software developers between 2005 and 2007. In order to allow the internal billing of software developer time, organizational projects were created for every type of work undertaken within the group. As each new project was created in the organization’s time tracking system, it would be assigned a ‘project type’ designation to indicate the overall type of work that was being undertaken. As defined by management, ‘project type’ included categories such as ‘new project’ work, existing application maintenance and support, administrative tasks, meetings, and personal time (e.g., sick, vacation and training). Management required all software developers to track their time each day by assigning durations to specific projects. Relying on this project classification scheme implemented by the organization, Hours of ‘New Project’ Work per Week (exploration) was extracted from the database. Because this work focuses on the impact of software developers, only time entered by software developers was included (e.g., manager and analyst time was not included). In a similar manner, Hours of Maintenance & Support Work per Week (exploitation) was extracted from the time tracking database. An overview of the weekly work hours recorded by software developers within the organization for new project and maintenance & support work is provided in Figure 2.

Figure 2. Software Developer Work Hours per Week (2005-2007)

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Independent Variables The present study focuses on understanding the impact of worker composition on actual work that is completed in a software development group. To examine this, two worker composition variables were specified for inclusion in the study: worker tenure and employment heterogeneity. First, Worker Tenure was determined by identifying active software developers for each week and then computing an average organizational tenure for those specific workers. To accomplish this, worker tenure was derived for each individual worker by identifying their first time entry date in the time tracking system and getting the difference, in weeks, between that start date and the week of interest. All worker tenure values were then combined and averaged for each week based on active workers for that particular week. The result of this process was an average worker tenure value (in weeks) for each week being investigated. For Employment Heterogeneity, we examined heterogeneity of employment arrangements within the software development group. Employees and contract software developers were identified in the data set and an index of heterogeneity was created for each week being investigated. To accomplish this, Blau’s index of heterogeneity (Blau, 1977) was utilized because of its ability to handle categorical data and its wide acceptance in social science research (Carpenter, 2002; Richard, Barnett, Dwyer, & Chadwick, 2004; Shin & Zhou, 2007). Following Blau’s (1977) definition, the index was calculated by , where represents the percentage of individuals in the ith category (employee or contract worker), and results in a theoretical value between 0 (completely homogenous) and 1 (completely heterogeneous). In this sample, weekly employment heterogeneity values range from 0 (no contract workers utilized) to a maximum of 0.50 (evenly divided between employees and contract workers). Control Variables In order to parse out the effect of worker tenure and employment heterogeneity on actual work performed, several control variables were included. First, the amount of work completed in a week is influenced by whether a holiday occurs during that week. In weeks where a work holiday exists, the time spent working that week will be less than would normally occur. In order to identify weeks where a work holiday occurred, time tracking information was parsed for time entries that indicated that time was taken for a work holiday. Because a floating holiday was provided for each worker in the organization, special care was taken to ensure that those dates were also considered in identifying holiday weeks. The Holiday Week variable was binary, where 1 indicated the week was a holiday week and 0 that it was not. A total of 21 weeks (7 weeks per year) were identified as holiday weeks within the current sample. Next, the number of active workers will have a direct impact on the total number of hours worked during the week. As the number of workers increases, it is understood that the number of hours worked within the group is likely to also increase. When investigating the hours of ‘new project’ worked per week, ‘New Project’ Worker Count was derived by getting the total number of workers that entered time (e.g., completed ‘new project’ work) for each week being examined. Similarly, examination of maintenance & support work required capturing Maintenance & Support Worker Count, represented as the total number of workers that entered time (e.g., completed maintenance & support work) for each week.

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Finally, worker time is a constrained organizational resource. In weeks where workers were required to focus on work not related to ‘new projects’, there was less time available to spend on ‘new project’ work (the same holds true for maintenance & support work). To control for this effect, Hours of Other Work per Week was included as a control for ‘new project’ work and maintenance & support work respectively. This value was derived by taking the total work time per week and removing the hours of work attributed to the dependent variable being examined (‘new project’ or maintenance & support work). 4. ANALYSES AND RESULTS Table 1 (‘new project’ work) and Table 2 (maintenance & support work) report the means, standard deviations and correlations for variables employed in this research. Results show that ‘new project’ work tended on average to have greater employment heterogeneity and a shorter tenure than demonstrated with maintenance & support work. On average, the amount of ‘new project’ work completed each week (221.33 hours, Table 1) was much higher than that of maintenance & support work (120.26 hours, Table 2). As expected, each control variable was significantly correlated with both ‘new project’ and maintenance & support work completed by software developers. This provides further support for including these specific variables as controls in the regression analysis. Tenure and heterogeneity variables were also significantly correlated with the amount of ‘new project’ and maintenance & support work completed each week.

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Table 1. ‘New Project’ Work Means, Standard Deviations, and Pearson Product Moment Correlationsa Correlations b

Variables

Means s.d.

1. Hours NP Work per 221.33 60.34 Week 2. Holiday Week

0.13

0.34

0.25**

3. NP Worker Count

9.90

1.60

0.59** 0.07

4. Hours Other Work per 165.65 52.50 -.48** Weekc

0.19† 0.12†

5. Worker Tenure

139.64 23.15 -0.02 0.61**

0.02 0.63**

6.Employment Heterogeneity

0.38

0.40** 0.30** 0.68**

0.15

-0.00 0.61**

N=156, † p < 0.10, * p < 0.05, ** p < 0.01

NP = ‘New Project’

Other work refers to developer work activities beyond ‘new project’ work

Table 3 presents the results of hierarchical multiple regression analyses for both ‘new project’ work (Model 1) and maintenance & support work (Model 2). For both regression analyses, a hierarchical approach was used to force the entry order of variables. Block 1 included control variables only while Block 2 added both worker tenure and employment heterogeneity variables. For both models, there was a significant change in F between Blocks 1 and 2 (p < 0.01), demonstrating that the primary research variables provide important explanatory power for the full model above that offered by control variables alone.

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Table 2. Maintenance & Support Work Means, Standard Deviations, and Pearson Product Moment Correlationsa Correlations Variablesb

Means s.d.

1. Hours of M&S Work 120.26 45.24 per Week 2. Holiday Week

0.13

0.34

0.23**

3. M&S Worker Count

7.76

1.73

0.78** -0.06

4. Hours of Other Work 266.72 56.02 0.10 c per week 0.36**

0.25**

5. Worker Tenure

0.05 0.80**

175.79 24.38 0.68** 0.02

6. Employment 0.22 Heterogeneity

0.15

0.53** 0.56** 0.12† 0.13† 0.45**

N=156, † p < 0.10, * p < 0.05, ** p < 0.01

M&S = Maintenance & Support

Other work refers to developer work activities beyond maintenance & support work Analysis confirmed that worker tenure was inversely related to the amount of ‘new project’ work completed within the group (H1, p < 0.01). Results also supported the assertion that increasing levels of employment heterogeneity exerts a positive impact on the amount of ‘new project’ work undertaken (H3, p < 0.01). Results failed to support the relationships posited in H2 and H4.

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Table 3. Results of Linear Regression Analysesa ‘New Project’ Work

Maintenance & Support Work

-0.199

4.856** 0.149 3.324**

-0.447

9.986** 0.271 5.434**

0.472

8.999** 0.352 3.996**

- Worker Tenure

-0.197

3.004**

- Employment Heterogeneity

0.156

2.633** 0.184 3.803**

0.76

0.71

94.03**

73.36**

Control Variables - Holiday Week - Hours of Other Work

- Worker Count Research Variables

3.698**

Full Model

N=156, * p < 0.05, ** p < 0.01

Other work refers to developer work activities beyond each model’s dependent variable

5. DISCUSSION An organization’s software development function serves two critical purposes: it enables the exploitation of existing knowledge and allows the exploration and realization of new knowledge. Findings in this study illustrate that software development group characteristics do impact the realization of that group’s exploration and exploitation capabilities. Specifically, results demonstrate that both worker tenure and employment heterogeneity directly shape new project and maintenance work within a software development group. As confirmed in H1, increased worker tenure does indeed reduce the occurrence of ‘new project’ work activities within the group. This finding is consistent with research showing that ‘old timers’ within a group often naturally gravitate towards existing mental models to accomplish work objectives, a tendency that can adversely impact innovative thinking and action (Lewis et al., 2007). Variance in group tenure is then especially important because it supplies cognitive diversity within the team. Cognitive diversity then provides the team with the ability to solve complex problems with innovative solutions (Larson Jr., 2007).

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Support for H3 confirms that employment heterogeneity within a group also plays an important role in encouraging ‘new project’ work activities. This finding is consistent with research highlighting the value of heterogeneity for encouraging innovative group behavior (Homan et al., 2008), as demonstrated in contexts such as corporate boards of directors (Rindova, 1999), top management teams (Carpenter, 2002) and workers in the financial services sector (Broschak & Davis-Blake, 2006). Employment heterogeneity within a software development group, enabled through the intermingling of employee and contract workers, provides an important avenue through which exploration activities can be surfaced. Facilitators of deep level diversity seem to be especially important within a software development environment where work compartmentalization is the norm and development tasks are complex. Contrary to our expectations, worker tenure and employment heterogeneity impacted the level of maintenance & support work in an opposite direction of what was hypothesized. While we posited that exploitation activities would move in the same direction as worker tenure (H2), the evidenced negative relationship implies a different process is at work. There are two likely explanations for this finding. The first is suggested within research on organizational identification (OI). OI is rooted in social identity theory and describes the degree that an individual ties their identity to the organization where they reside (Ashforth & Mael, 1989). Importantly, OI is “more than just considering oneself a member of an organization; it is the extent to which one includes the organization in his or her self-concept” (Sluss & Ashforth, 2008, p. 812). As worker tenure increases, workers are more likely to experience an OI that pulls them away from job-related activities and more into the social structure of the organization (e.g., talking around the water cooler, participation in meetings). An expectation to participate in activities beyond the domain of an individual’s explicit job requirements can redirect limited worker resources. As such, increases in worker tenure can actually serve to reduce the amount of job-related work undertaken. Another possible explanation for these findings might relate to a modification of work expectations that result from changes in tenure. Shifts in worker tenure (e.g., exit of existing workers and the addition of new workers) can drive management to implement coping mechanisms that minimize anticipated negative impacts on a group (Droege & Hoobler, 2003). For example, management will be acutely aware of changes in worker resources and subsequently adjust the scope and focus of the group's project portfolio to fit the current resource pool (Engwall & Jerbrant, 2003). Further, the exit of workers can force remaining members to discover, learn and ingest activities that have been orphaned through attrition. As these orphaned activities are reassigned, workers must invest time and attention so that the activities can be understood and addressed. While these two possible explanations seem reasonable, further research is needed to clarify the relationship between worker tenure and exploitation. Further, the proposed negative relationship between employment heterogeneity and exploitation activities (H4) was found to be positive and significant. Despite our assertions that heterogeneity complicates the coordination and credibility necessary for exploitation of existing resources, it is possible that the relatively small size of this particular software development group allowed specialized knowledge to flow even in the face of employment heterogeneity. Importantly, contract workers are able to provide “a fresh look at processes [which] enhances the speed of learning, particularly for routine processes” (Wiersma, 2007, p. 1907). Further, the knowledge gained JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 483-502

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through new product development could offer important lessons for exploitation of existing systems. The small group size in this particular organization and frequent interaction of all members (through weekly meetings) allowed each person to have a fairly comprehensive view of all ongoing development work. With a greater diversity of knowledge in the group, and a consistent means of distributing that knowledge, all workers were able to apply a more critical view towards existing systems. As such, the diversity within this particular group could possibly have worked to promote exploitation of existing resources. Future research is needed to clarify the impact of employment heterogeneity on exploitation activities. 6. IMPLICATIONS

Findings hold several important implications for both researchers and practitioners. Within the research community, the proposed model and associated findings highlight that the changing nature of group characteristics are integral to understanding the expression of a group’s work activities. In order to properly examine the nature of work being performed within a software development group, one must account for worker tenure and employment heterogeneity. By examining these specific group characteristics, this research extends existing perspectives on factors which influence innovative behavior (Doll & Deng, 2011). For worker tenure, analysis revealed a negative relationship with both ‘new project’ work (exploration) and maintenance & support work (exploitation). Exploration findings suggest that team turnover creates an environment where knowledge search and recombination produce innovative thinking and novel problem solving. Future efforts can extend this research by specifically considering how turnover shapes the production, distribution and integration of knowledge within a group. Further, exploitation findings suggest that factors beyond the developer’s control (e.g., task re-assignment and work expectations beyond explicit job requirements) might play an important role in shaping actual work activities. Future research can examine this issue by explicitly examining managerial and social aspects of the development environment. For employment heterogeneity, findings confirm the importance of diversity for exploration activities while also demonstrating that heterogeneity can play an important role in determining the level of exploitation work that occurs within a group. Our findings suggest that coordination mechanisms can adeptly shift within a projectoriented environment, attenuating the potential negative effects of increased employment heterogeneity. Future research can draw on these ideas to take a more detailed look at how groups alter coordination approaches in the face of changes to group-level heterogeneity. Further, these results offer researchers a new approach for examining group outcomes. Specifically, this work examined two important types of software development group work: exploration and exploitation. While a large body of research exists where innovative group outcomes are considered (e.g., exploration), very few explicitly examine factors that shape incremental outcomes (e.g., exploitation). Future research can draw on this knowledge-based view of work to extend group-level research towards a more robust view of group dynamics. Findings also have important implications for managers, especially those within software development environments. Results suggest that managers should pay special

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attention to the work effects that result from an entrance and exit of disparate workers. In cases where worker tenure changes significantly, managers should take efforts to ensure that specialization, coordination and credibility are nurtured. By focusing on the shared knowledge within a group, managers can reduce the negative effects of worker transition and increase the potential for exploration and exploitation activities. Utilizing a heterogeneous workgroup can yield important results for both exploration and exploitation, provided that specialized knowledge remains accessible to all group members. 7. LIMITATIONS

While implications of this research are important, results must be viewed in light of several important limitations. The most critical limitation relates to the lack of generalizability that is inherent when investigating phenomena within one organization. Specifically, findings could be the result of idiosyncrasies within this one organization. While this is certainly a limitation, the abundance of longitudinal data within this particular organization allows us to investigate the impact of worker tenure and employment heterogeneity in a rich and meaningful way. To address this limitation, future research should seek to gather data from a large sample of firms so that the impact of worker tenure and employment heterogeneity can be confirmed across organizations and industries. Future studies should also incorporate measures that could affect software development group success, such as the project type and size, the size of the organization, the overall years of experience for the group member, and the size of the software development group itself. For example, studies should seek to determine if small versus large software development groups have the same factors of impact. Additionally, the use of archival data does not allow us to examine group dynamics which are certainly important in shaping group productivity. For example, the existing data set does not allow us to examine the role of team synergy, a factor that has been shown to be critical for successful and productive heterogeneous group (Larson Jr., 2007). Future research can extend these findings by observing and documenting how teams work together during the software development process so that a richer understanding can be achieved. Additionally, future research studies should consider surveying the software development group members in order to confirm the archival data findings. Interestingly, our findings related to the adverse effect of worker tenure on exploitation behaviors seemingly conflicts with observations in a recent meta-analysis where worker tenure was found to have no effect on individual creativity (Ng & Feldman, 2010). While creativity and exploitation (e.g., innovation) are highly related terms, the variance between findings could suggest that these concepts are distinct. Further, the discrepancy could also reflect a difference in the use of objective measures in our study versus perceptual creativity measures utilized in their meta-analysis. This study also differed by examining group exploitation outcomes versus individual outcomes, a perspective which could result in different findings. Future research should examine these differences in order to clarify the impact of worker tenure on broader measures of innovative behavior.

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While this study looked at one characteristic of diversity, that of a contract worker versus an employee, research has shown that a more nuanced view of diversity is needed to understand the full impact of group heterogeneity on outcomes (Thatcher, Jehn, & Zanutto, 2003). Future studies should incorporate other important measures of deep- and surface-level diversity, such as expressed in member skills, job function, gender, age, and race. Finally, organizational size is an additional limitation that must be acknowledged. The development group being considered in this study was relatively small, which can potentially impact the distribution of knowledge within a group. A larger software development group could possibly demonstrate findings more in-line with the original hypotheses. Future studies should examine a large, medium, and small software development groups in order to provide a more complete picture of how worker tenure and employment heterogeneity impact work activities. 8. CONCLUSION This paper extends existing research on software development productivity by examining how changes in group composition can impact work activities within a software development group. Findings demonstrate that worker tenure and employment heterogeneity play an important role in influencing the exploration (â&#x20AC;&#x2DC;new projectâ&#x20AC;&#x2122;) and exploitation (maintenance & support) activities undertaken within the software development group. This insight is especially important within contemporary organizations, where developer turnover and a mixed workforce (employee and contract workers) are often a reality. REFERENCES Ang, Soon, & Slaughter, Sandra A. (2001). Work Outcomes and Job Design for Contract Versus Permanent Information Systems Professionals on Software Development Teams. MIS Quarterly, 25(3), 321-350. Ang, Soon, & Slaughter, Sandra A. (2004). Turnover of information technology professionals: the effects of internal labor market strategies. The DATA BASE for Advances in Information Systems, 35(3), 11-27. Ashforth, Blake E., & Mael, Fred. (1989). Social Identity Theory and the Organization. Academy of Management Review, 14(1), 20-39. Blau, Peter M. (1977). Inequality and Heterogeneity: A Primitive Theory of Social Structure. New York, New York: The Free Press. Broschak, Joseph P, & Davis-Blake, Alison. (2006). Mixing Standard Work and Nonstandard Deals: The Consequences of Heterogeneity in Employment Arrangements. Academy of Management Journal, 49(2), 371-393. Cady, Steven H., & Valentine, Joanie. (1999). Team Innovation and Perceptions of Consideration: What Difference Does Diversity Make? Small Group Research, 30(6), 730-750. Cardon, Melissa S. (2003). Contingent Labor as an Enabler of Entrepreneurial Growth. Human Resource Management, 42(4), 357-373.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.503-520 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300003

THE INFLUENCE OF SHARED MENTAL MODELS BETWEEN THE CIO AND THE TOP MANAGEMENT TEAM ON THE STRATEGIC ALIGNMENT OF INFORMATION SYSTEMS: A COMPARISON BETWEEN BRAZILIAN AND US COMPANIES Nicolau Reinhard José Ricardo Bigueti University of São Paulo, São Paulo, São Paulo, Brazil _____________________________________________________________________ ABSTRACT The gap in the understanding between the chief information officer (CIO) and the management team (TMT) has been cited as a contributing factor to their often troubled relationship. The objective of this study is to examine the development of shared mental models (SMMs) between the CIO and TMT about the role of information systems in the organization. An SMM is conceptualized as a multidimensional construct spanning the dimensions of shared language and shared understanding. The study posits that knowledge exchange mechanisms and relational similarity between the CIO and TMT are key antecedents to the development of SMMs. SMMs between the CIO and TMT are expected to guide the strategic orientation of the organization and may influence strategic alignment and organizational outcomes. The model was tested via a field survey of CIO – TMT pairs using structural equation modeling. Results show that relational similarity and formal mechanisms of knowledge exchange (e.g., formal CIO membership in the TMT, CIO hierarchical level, and formal educational mechanisms by the CIO) are important to the development of SMMs. Contrary to expectations, informal social mechanisms of knowledge exchange and physical proximity were not significantly related to SMMs. Keywords: IS alignment, CIO, shared mental models, knowledge exchange, Brazilian companies

_____________________________________________________________________________________ Manuscript first received/Recebido em 17/09/2011 Manuscript accepted/Aprovado em: 08/07/2013 Address for correspondence / Endereço para correspondência

Nicolau Reinhard, Nicolau Reinhard is a professor of management at the School of Economics, Administration and Accounting of the University of São Paulo, Brasil. His research interests and publications are related to Management of the IT function, the use of IT in Public Administration and Information Systems Implementation. Prof. Reinhard has a degree in Engineering, a PhD in Management, and, besides his academic career, has held executive and consulting positions in IT management in private and public organizations. School of Economics, Administration and Accounting University of São Paulo Av. Prof. Luciano Gualberto, 908 05508-010 São Paulo – Brasil Tel: (55) 113091-5838 E-mail: reinhard@usp.br José Ricardo Bigueti, has a bachelor degree in Computer Science, an MBA in Information Technology Management and an MSc in Administration from the University of São Paulo. He is presently a Senior I/S Security Manager for The Dow Chemical Co., in Midland, Michigan, USA. School of Economics, Administration and Accounting, University of São Paulo Av. Prof. Luciano Gualberto, 908 05508-010 São Paulo – Brasil Tel: (55) 11-3091-5838 E-mail: rbigueti@hotmail.com Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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INTRODUCTION

Strategic IS alignment has been reported as one of the major preoccupations of the Chief Information Officer (CIO) (Reich; Benbasat, 2000; Chan, 2002; Leonard; Seddon, 2012), IS alignment being defined as the congruence between the business strategy, managed by the Top Management Team (TMT), and the IS strategy in the organization (Henderson; Venkatraman, 1999; Sabherwal, 2001). Despite their heavy investments in IS, many organizations have not been able to reap significant business results. In fact, IS investments will not improve business performance unless they are made according to an IS strategy that is aligned with the organizationâ&#x20AC;&#x2122;s business strategy. This alignment has proved to be a hard to achieve goal (Weill, 1990). Understanding the organizational factors that contribute to this goal has been a research objective for a long time (Chan, 2002; Ball et al, 2003), with communication between the CIO and the TMT, organizational characteristics and an understanding of the IS competencies (Reich; Benbasat, 2000; Chan, 2002) among them. This paper focuses on the shared language and shared understanding between the CIO and the TMT that, collectively, constitute the Shared Mental Model (SMM), on the strategic IS alignment and the factors leading to the development of this shared language and understanding. CIOs are expected to be key contributors in this process and, therefore, this paper will focus on the CIOs and on their the importance achieving the sharing of language and understanding with the TMT. (Preston; Karahana, 2009; Preston, 2004). The research questions are 1 What is the relationship between the SMM and the strategic IS alignment? 2. What are the antecedents to a SMM of the CIO and the TMT? 3. Is there a difference between Brazilian and US companies in this respect? As a by-product, the study also aims at validating in a different context (the IT function in Brazilian business), the research model and instruments developed by Preston 2004, including the questionnaire and constructs for SMM. This paper also aims at verifying the applicability of SMM concepts and management principles developed in different cultural and business contexts in Brazilian companies. 2 LITERATURE REVIEW AND RESEARCH MODEL CONSTRUCTS Our research is based on a basic conceptual model, developed by Preston 2004. The components of this conceptual model are depicted in Figure 1.

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Relational Similarity Shared Mental Models

Strategic IS alignment

Knowledge Exchange Mechanisms Figure 1 The basic conceptual model Previous research has indicated Mechanisms for knowledge exchange and Relational similarity as antecedents to SMM. Knowledge exchange mechanisms comprise knowledge systems and mechanisms for educating the CIO and the TMT. This includes structure (for example, the CIO’s position in the hierarchy and his/her participation in the TMT), physical systems (the CIO’s office being located close to the TMT office) and social systems (such as, informal interaction between the CIO and the TMT), thus allowing the CIO to be proactive in facilitating the knowledge exchange by educating the TMT and therefore contributing to the development of a SMM. (PRESTON, 2004) Relational similarity considers the demographic similarity and the similarity of past experiences of the CIO and the TMT. The Upper Echelon Theory is used to link these factors to the organization’s strategies (for example, the IS alignment). (Hambrick; Mason, 1984). The principle of attraction by similarity provides a basis for linking relational similarity with knowledge exchange mechanisms, especially social knowledge systems. (Orpen, 1984; Byrne, 1971). 2.1 Strategic IS alignment Strategic alignment is consistently ranked as a key issue for IS managers, due to its strategic benefits to the organization. This has led to a strong tradition in IS alignment research, with different developments in theory, addressing the changing issues faced by IS managers. (Leonard; Seddon, 2012) For this research IS alignment is defined as the congruence between the business and IS strategy in the organization: the degree in which the mission, goals and plans for IT support and are supported by the mission, goals and plans for the business (Reich; Benbasat, 1996). Past research has indicated two benefits of this strategic alignment: IS effectiveness (Chan, 2002) and IS higher performance (Sabherwal; Chan, 2000; Sabherwal et al, 2001). Strategic IS alignment, as opposed to structural IS alignment, focuses on the intellectual dimension (the content of the organization’s plans) and social dimension (the actors in the organization, their values, communication and understanding of their domains). The intellectual dimension is a state or a result (with antecedents being the alignment, the communication among the actors, the business and IS plans), while the social dimension is the congruent understanding of the persons involved in the alignment (Reich; Benbasat, 2000).

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Other antecedents for the strategic alignment of IS in the organization are: the Relationship between the CIO and the TMT (Rockart et al, 1996; Chan, 2002), shared knowledge and understanding between the CIO and the TMT (Armstrong; Sambamurthy, 1999; Reich; Benbasat, 2000), the organization’s business strategy (Reich; Benbasat, 2000; Sabherwal), senior executives’ planning process (Reich; Benbasat, 2000; Chan, 2000). Strategic IS alignment has also been shown to be linked to agility and firm performance (Tallon; Pinsonneault, 2011) 2.2 Mental Models and Shared Mental Models There are multiple definitions of Mental Models (MM), such as set of beliefs, understandings, mental representations, cognitive constructs, cognitive systems, assumptions, habits and paradigms (Denzau; North, 1994), (Van den Bosch; Volberda, 1999), (Peterson et al, 2000). The Shared Mental Model (SMM) has also multiple definitions in the literature. Examples are: values, myths, shared standard operational procedures and beliefs (KIM, 1993); an understanding of the organization or mental representation of the group’s key elements, a frame of the structure, processes and tasks of a group, which its members have in common (Mohammed et al, 2000). In this paper, we will use Preston’s (Preston 2004, p.18) definition: “Shared Mental Models are shared beliefs and understanding of the role of Information Systems in the organization, together with a common shared language that has its own vocabulary and nuances”. This definition suggests two different dimensions in SMM: a shared language and a shared understanding. According to Preston (2004), the strategic alignment of IS can be achieved through this multidimensional SMM between the CIO and the TMT. Previous research, although not using the same language, also supports this contention. (Madhavan; Grover, 1998) (Lederer; Mendelow, 1987) The shared language dimension of SMM between the CIO and the TMT has clear implications for the CIO. His/her success will depend on how well this executive communicates with the other executives in the organization. Nelson and Cooprider (1996) argue that a shared language can create a positive social influence among the top managers; therefore the CIO should communicate using business terms comprehensible to the top manager, instead of a technical language full of acronyms (Feeney et al, 1992). 2.2.1 Shared understanding SMM have been associated with shared understanding (Mohammed et al, 2000; Peterson et al, 2000), congruence of visions (Feeny et al, 1992; Kim, 1993). Other researchers have associated SMM with knowledge shared among individuals or groups: shared knowledge structures (Richards, 2001); shared social knowledge structures (Swaab et al, 2002); and shared previous knowledge (Madhavan; Groover, 1998). Shared understanding is not the same as shared knowledge. In fact, shared understanding is facilitated by the mechanisms of knowledge exchange. Shared understanding can be obtained when the CIO and the TMT have respectively high levels of business knowledge and IS knowledge and exchange this knowledge (Armstrong; Sambamurthy, 1999). These exchange mechanisms will allow the CIO and the TMT understand how IS can be best used to improve the organization’s performance. Studies that have focused on the SMM antecedents have identified communication and feedback (Rasker; Post, 2000) and negotiation (Swaab, 2002) as

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key elements for the development of SMM among the parties. Preston (Preston, 2004) extends this list to include the following antecedents of SMM:knowledge exchange mechanisms and relational similarity. There is evidence that the CIO and the TMT often do not have a shared language and understanding of the role of IS, due to a limited IS strategy of the TMT and a limited business knowledge of the CIO (Armstrong; Sambamurthy, 1999). Knowledge exchange mechanisms are therefore an important antecedent for the alignment of the IS strategy. The literature presents two primary mechanisms for knowledge exchange that contribute to the development of a SMM between the CIO and the TMT: knowledge systems and the CIO’s education mechanisms. 2.2.2 Knowledge systems Organizations provide their members with multiple ways to interact and exchange knowledge. According to Nahapiet and Ghoshal (1998) organizational competencies to generate and share knowledge derive from factors, such as special means to create and transfer tacit knowledge; the organizational principles according to which individual and functional abilities are structured, coordinated and communicated and used by individuals to cooperate; the nature of organizations as social communities. For individuals to transfer knowledge, they have to have the ability to interact with one another. Systems in the organization that provide this ability are called knowledge systems. According to Armstrong and Sambamurthy (1999) formal and informal interactions between top management allows stronger knowledge integration. Knowledge systems reflect the possibilities of CIO and TMT to access richer channels, develop more effective social relations and communication patterns (Armstrong; Sambamurthy, 1999) Three dimensions can be identified in a knowledge system: 1 structural knowledge systems, comprising the formal interactions permitted by the established organizational structure, 2 physical knowledge systems, related to the interactions allowed by the proximity of the CIO and TMT’s offices and 3 Social knowledge systems, related to the informal interactions among CIO and TMT. Structural Knowledge Systems Structural knowledge systems allow the CIO to interact with the TMT. In addition to the formal communication channels, these systems include the CIO’s hierarchical level (Feeny et al, 1992; Watson, 1990) and his/her participation in the TMT itself (Watson, 1990). The higher the CIO’s hierarchical position, the higher his/her opportunity to understand the corporation and its strategy (Lederer; Mendelow, 1987), impact organizational decisions (Schrage, 1996), exercise power (Karimi; Gupta 1996; Rockart et al, 1996; Smaltz, 1999) and ultimately corporate effectiveness (Armstrong, 1995).

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Participation in the TMT has been shown to be vital for the CIO’s effectiveness (Rockart et al, 1996, Smaltz, 1999), allowing an effective information exchange information with the TMT. In fact, if the TMT does not fully accept the CIO and allow his/her participation, this will minimize his/her influence in the organization (Smaltz, 1999). Physical Knowledge Systems Organizational proximity is defined as persons occupying the same space, with the opportunity and psychological obligation to face-to-face communication (Monge et al, 1985). With an office located close to the TMT’s, the CIO will increase his/her opportunity to engage in this face-to-face communication, allowing a more effective communication of complex messages and reaching a common perspective on ambiguous issues (Daft et al, 1987; Watson, 1990). Social Knowledge Systems Social knowledge systems focus on informal interactions contribute to communication and knowledge sharing (Alavi; Leidner, 2001), increase exchange of ideas and common understanding (Watson, 1990; Armstrong, 1995; Chan, 2002). 2.2.3 CIO education mechanisms The literature indentifies the advantages of the CIO being allowed to formally educate the TMT about the IS competencies, in order to facilitate the common understanding between the CIO and the TMT. (Smaltz, 1999; Enns et al, 2003). Preston (2004) also indicates the importance of knowledge exchange facilitated by the CIO in educational activities. As mentioned before, poor IS alignment is also caused due to the lack of the TMT’s understanding of IS strategic competencies. The CIO’s educational function can help bridging this gap. This knowledge exchange is not necessarily captured by the organization’s knowledge system. The CIO can use every opportunity for interaction with the TMT, but also formal events to educate the TMT about IS competencies. According to Preston (2004) these mechanisms contribute to the development of sharing Mental Models between the CIO and the TMT. 2.2.4 Relational Similarity Relational Similarity is defined as similarity between the CIO and the TMT in basic characteristics, such as demographic (age and gender), past experiences (knowledge of the organization, time in executive position in the organization, functional origin, educational level and personal interests) Upper Echelon Theory provides support for relating the basic characteristics of the TMT and the strategic IS alignment and between SMM and IS strategic alignment. This theory states that organizational results can be predicted from the basic characteristics of top level executives (not just the CEO, but of the dominating coalition), such as gender, age, past experiences, education, etc and that these results reflect their values and perceptions (Hambrick; Mason, 1984). These results include performance and strategic decisions. Hambrick and Mason (1984) have argued that basic characteristics reflect one’s person cognitive map and therefore impact their capacity to interpret data and transform them into knowledge. Thus making strategic business and IS decisions should be

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influenced by the managers’ basic characteristics: demographic and those related to past experiences. Preston (2004), based on the Upper Echelon Theory, proposes SMM as a mediating variable to capture the cognitive map of the dominating coalition that can then be used to mediate the relationship of past experiences and demographic characteristics of the CIO and TMT and the organization’s strategic choices, leading to the IS alignment. Demographic Similarity Demographic Similarity refers to comparable demographic characteristics of members of couples or groups that are in a position of involvement in regular interaction. The conceptual basis for relational demography is the paradigm of attraction by similiarity, which suggests that individuals tend to be attracted to those that are more similar to them. Interpersonal attraction is based on the similarity of individuals on various dimensions, such as attitudes, age, gender, time in the organization, educational level, area of graduation, market experience, time in the team or company, functional or professional specialty (Allinson et al, 2001; Van der Vegt, 2002). 3. THE RESEARCH MODEL The reference model and research method used in this research are based on Preston (2004), with adaptations to the Brazilian situation made by Bigueti in his MS dissertation (Bigueti, 2007). In this survey the term CIO is used in a rather loose form, referring to persons with different titles, as long as they are the principal or most influential IS/IT executives in the organization. (Grover et al, 1993; Armstrong, 1995). TMT is defined as the CEO and the most senior and influential executives in the organization, reporting directly to the CEO. (Finkelstein; Hambrick, 1996). Based on the previously discussed importance of the relationship between the CIO and the TMT, our research focuses on the couple CIO – TMT in the organization, positing the relationships depicted in Figure 2.

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Figure 2 â&#x20AC;&#x201C; Research model â&#x20AC;&#x201C; constructs and hypothesized influence relationships

3.1 Research hypotheses and Operationalization of Constructs There are two groups of hypotheses: 1. Related to the strategic IS alignment in the organization and 2. Related to the SMM between the CIO and the TMT. 3.1.1 SMM and Strategic IS Alignment The literature provides evidence of the relationship between IS alignment and communication and common understanding between the CIO and the TMT. SMM should then contribute to provide a congruence of visions related to key IS issues and improve the alignment of business and IS decisions, providing the rationale for the following research hypotheses: H1: high levels of SMM between the CIO and the TMT contribute to the alignment between IS and business strategies in the organization H1a: high levels of shared language between the CIO and the TMT contribute to the alignment between IS and business strategies in the organization H1b: high levels of shared understanding between the CIO and the TMT contribute to the alignment between IS and business strategies in the organization

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3.1.2 Shared Language and Shared Understanding Nahapiet and Ghoshal (1998) and Boynton et al (1992, p.32) have shown that the creation of a shared understanding is unlikely in the absence of a common shared language [between the CIO and the TMT], therefore justifying the hypothesis: H2: a shared language between the CIO and the TMT contributes to a shared understanding between the CIO and the TMT on the role of IS in the organization 3.1.3 Shared Mental Model antecedents Our research model considers three primary antecedents that contribute to the development of a SMM between the CIO and the TMT: knowledge systems (structural, physical and social), CIO education systems and relational similarity. All three are seen as influencing directly the SMM, while the relational similarity is also supposed to influence the organization’s social knowledge system. 3.1.4 Knowledge Systems and SMM Knowledge exchange, which is considered critical for the development of a SMM between the CIO and the TMT, can be achieved through structural knowledge systems, physical knowledge systems, social knowledge systems, according to authors (Armstrong; Sambmurthy, 1999). Two aspects of the structural knowledge systems are considered in the model, which, according to Feeny et AL (1992), are essential for the CIO’s performance: direct reporting to the CIO and participation in the TMT. There is research indicating that these situations contribute to the development of SMM between the CIO and the TMT (Watson, 1990; Smaltz, 1999). H3a: Structural knowledge systems contribute to the development of a shared language between the CIO and the TMT H3b: Structural knowledge systems contribute to the development of shared understanding between the CIO and the TMT. 3.1.5 Physical Knowledge Systems and SMM Physical proximity of the CIO and the TMT’s offices influences communication and knowledge exchange, allowing the CIO a better perception of organizational objectives, of commonalities with the TMT and a more effective engagement in the management process. Therefore: H4a: Physical knowledge systems contribute to the development a shared language between the CIO and the TMT. H4b: Physical knowledge systems contribute to the development of a shared understanding between the CIO and the TMT on the role of IS in the organization. 3.1.6 Social Knowledge Systems and SMM Frequent informal networking helps developing SMM among individuals, by developing shared language and understanding (Denzau; North, 1994). Successful CIOs value informal communication and socialize with the TMT, becoming able to evaluate their motivations, meanings and priorities and testing their business vision (Earl; Feeny, 1994). Therefore:

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H5a: Social knowledge systems contribute to the development of a shared language between the CIO and the TMT. H5b: Social knowledge systems contribute to the development of a shared understanding between the CIO and the TMT on the role of IS in the organization. 3.1.7 CIO education mechanisms and SMM CIOs should use their specialized IS knowledge to continually educate the TMT on IS competencies and help them interpreting new external ideas, experiences and success stories and manage expectations and thus maintaining their SMMs. (Lederer; Mendelow, 1987). Therefore: H6a: The CIOâ&#x20AC;&#x2122;s educational mechanisms contribute to the development of a shared language between the CIO and the TMT. H6b: The CIOâ&#x20AC;&#x2122;s educational mechanisms contribute to the development of a shared understanding between the CIO and the TMT on the role of IS in the organization. 3.1.8 Relational Similarity and SMM Individuals with a similarity of demographic characteristics and past experiences tend to develop common language, attitudes, perceptions, understanding, values and beliefs and a convergent mental model (Denzau; North, 1994; Hodgkinson; JOHNSON, 1994). Therefore: H7a: Demographic similarity contributes to the development of a shared language between the CIO and the TMT. H7b: Demographic similarity contributes to the development of a shared understanding between the CIO and the TMT on the role of IS in the organization. H8a: similarity of past experiences contributes to the development of a shared language between the CIO and the TMT. H8b: similarity of past experiences contributes to the development of a shared understanding between the CIO and the TMT on the role of IS in the organization. 3.1.9 Relational Similarity and Social Knowledge Systems Relational similarity should also contribute to the informal interaction among individuals. Relational similarity of the CIO and the TMT should benefit their interaction, since individuals with similar demographics and past experiences tend to communicate, act favorably and value their association more than dissimilar groups. Therefore: H9: Demographic similarity between the CIO and the TMT contributes to the development of social knowledge systems (i.e. the increase of informal interaction between the CIO and the TMT) H10: similarity of past experiences between the CIO and the TMT contributes to the development of social knowledge systems (i.e. the increase of informal interaction between the CIO and the TMT) 3.2 Operationalization of the constructs The operationalization of the constructs and survey questionnaire was adapted from Preston (2004) with the translation of the survey questions. The questionnaire was

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validated by a sample of local CIOs and TMT in order to assure the adequate understanding of the questions. 4 RESEARCH METHODOLOGY This survey is based on a convenience sample of large Brazilian companies, using a structured questionnaire to be answered by pairs of CIOs and TMT members of the same company. 4.1 Operationalization and measurement of the variables Demographic Similarity and Similarity of Past Experiences: This construct includes the questions about age, gender, education background, time in the organization and the present position and experience in other functions. These dimensions, measured for the CIO and the TMT, are the input to a similarity measure, obtained from an adapted Euclidian distance function between the CIO and the TMT (Wagner et al, 1984; Young; Buchholtz, 2002). The operationalization of the variables, presented in Figure 2, follows the Preston 2004 study, in order to allow the comparison of results of the US and Brazilian cases. 4.2 Target Population and Survey Sample Since the research focuses on the development of SMM between the CIO and the TMT, only organizations that have an IS manager in executive position are considered in the sample. The requirement that the survey be responded by pairs of CIOs and CEOs (or TMT members), required special motivation of otherwise overloaded individuals, for which the influence provided by national industry and professional associations, as well as the researcher’s networks was instrumental in obtaining the survey sample and the needed follow-up mechanisms. The questionnaire was first distributed over the Internet (by e-mail addressed to potential respondents with a link to the questionnaire web page), thus also ensuring the respondents’ anonymity, with the already mentioned follow-up, resulting in respondents from multiple segments: private companies of varied sizes, in the industry and service segments, with national and multinational capital. 4.3 Data collection The survey consisted of two questionnaires, one for the CIO and the other for the TMT member. For a questionnaire to be considered valid it had to be responded in pairs for each company. Several organizations provided contacts and encouraged their member to answer: GUI, a group of 16 CIOs of large companies, GETI, another association of IT executives of various industries, ABIQUIM, the Brazilian Association of Chemical Industries, AMCHAM, the American-Brazilian Chamber of Commerce, USP-MBA alumni, the association of MBA alumni of the University of São Paulo. The data were collected between January and April 2007.

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The e-mail referring to the questionnaires, with letters of recommendation from the Associations Leadership, was sent initially to the companiesâ&#x20AC;&#x2122; CIOs, asking them to provide a respondent from their TMT. 5 RESULTS ANALYSIS 5.1 Descriptive statistics Response rates for surveys requiring CIO CEO paired responses are usually low, with reported 7 to 20% response rates. In our research 180 companies were contacted, resulting in 62 reponses , with 35 usable response pairs, a 32.2% valid response rate. The breakdown of responses by control variable is presented in Table 5 One of our basic goals was to identify differences of SMM development and IS alignment between Brazilian companies and multinational companies (the other being the comparison with the US-based Preston 2004 study). However, an ANOVA variance analysis on the national/multinational variable and also the service/industry classification showed no significant difference among the groups. Therefore the hypotheses were tested for the responses as a single group. The data collection process led to a sample that contains large companies only, with a breakdown by segment and capital origin presented in Table 1 Segment Services

National Multinational 4

Chemical-Petrochemical

Cosmetics

Food

Mechanical

Consumer goods/electronics

Total

Industry

Table 1: Distribution of responses by industry and capital ownership 5.2 Factor Analysis and Hypotheses testing Construct validation: The structuring of the constructs from the basic variables (questionnaire items) was validated through a confirmatory Factor Analysis, demonstrating the validity of all constructs in terms of factor loads, internal consistency and discriminant validity.

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5.2.1 Hypotheses Testing In order to maintain the compatibility with the Preston 2004 study, the test of hypotheses will be made using PLS Partial Least Squares, a technique sufficiently robust for small samples. Table 2 presents the results of the Hypotheses test and the comparison with the results of the Preston 2004 study, highlighting the differences in findings. Hypotheses

Brazil

PRESTON

H1a: Shared language  Strategic IS alignment

H1b: Shared understanding  Strategic IS alignment

S (*)

S (**)

H2: Shared language  Shared understanding

S (*)

S (**)

H3a: Structural knowledge system  Shared language

H3b: Structural knowledge system  Shared understanding

S (*)

S (**)

H4a: Physical knowledge system  Shared language

S (**)

H4b: Physical knowledge system  Shared understanding

H5a: Social knowledge system  Shared language

H5b: Social knowledge system  Shared understanding

H6a: CIO education mechanisms  Shared language

H6b: CIO education mechanisms  Shared understanding

S (*)

S (**)

H7a: Demographic similarity  Shared language

NSt

H7b: Demographic similarity  Shared understanding

H8a: Past experiences similarity  Shared language

S (**)

H8b: Past experiences similarity  Shared understanding

H9: Demographic similarity  Social knowledge system

S (*)

S (**)

H10: Past experiences similarity  Social knowledge system

S (*)

S (**)

S (*) Supported at 5% significance level, N=35 S (**)Supported at 5% significance level, N=125 NS: not significant Table 2: Comparison of results of the Brazilian and US studies (Preston 2004) Figure 3 illustrates the research model with the hypotheses supported by the analysis

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Figure 3: Constructs and significant relationships Table 3 presents the variance of the dependent variables explained by the model. Dependent Variable

Explained Variance Antecedents % paths

and

significant

IS strategic alignment de 35,8% SI

Shared Understanding (*)

Shared Understanding

Shared Language (*) 64,3%

Structural Knowledge Systems (*) CIO Education Mechanisms (*)

Social Knowledge Systems

Demographic Similarity (*) 22,1%

Similarity of Past Experiences (*)

(*) significant at 5% level Table 3: Dependent Variablesâ&#x20AC;&#x2122; variance explained by the model 5.2.2 Comparison between the Brazilian and the US (Preston 2004) study results Table 2 demonstrates the consistency of the results of both studies. The absence of a significant influence of the social dimension (and even the demographic and past experiences in the Brazilian study) on the development of SMM and IS alignment can be interpreted as the result of a high degree of formality of the CIO function and its relation to the TMT. Organizational proximity and similarity of past experiences, identified in the Preston 2004 study (Preston 2004) as influencing the development of a shared language between the CIO and the TMT, were not confirmed in our study, a result that can also be interpreted as a sign of the weakening of the strategic role of IS and the CIO. These JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 503-520

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results run against the general belief of the importance of informal relations in the Brazilian national and managerial culture and deserve further research. 6 CONCLUSIONS The first result of the study was a new statistical validation of the constructs proposed by Preston 2004 using the Brazilian sample. The relationships among the constructs that resulted from the analysis are almost identical with the Preston 2004 findings, confirming the robustness of the model. Strategic IS alignment is, according to our study, influenced by shared understanding, with the latter being influenced by the structural knowledge system and the CIO education mechanisms. In addition, shared understanding is also influenced by the shared language construct. These findings show that mainly formal aspects determine the CIO/TMT relationship. The social dimensions of the relationship that have been evidenced in other authorsâ&#x20AC;&#x2122; previous research did not show up as significant in our study. In this respect our results differs from the Preston 2004 study which had found also a significant influence of similarity of past experiences and physical knowledge system (organizational proximity) on the shared language construct, and therefore indirectly on the strategic IS alignment. The answers to the proposed research questions 1. What is the relationship between the SMM and the strategic IS alignment? The study validated an influence path: structural knowledge system on shared language on the shared understanding between the CIO and the TMT on the strategic IS alignment, with an additional influence of CIO education mechanisms on shared understanding. This path explained 35.8% of the variance of the strategic IS alignment construct. Demographic characteristics and shared past experiences were also shown to influence the social knowledge system, but without significant influence on the shared mental model constructs and strategic IS alignment. 2. What are the antecedents to a SMM of the CIO and the TMT? This study analyzed the influence of two primary antecedents on shared mental models: mechanisms of knowledge exchange and relational similarity. The results support only the influence of structural knowledge systems and CIO education mechanisms as antecedents to Shared Mental Models. These constructs explain a significant 64.3% of the variance of the shared understanding construct. As for relational similarity, the constructs were shown to influence only the social knowledge system and explaining only a small percentage of its variation (22.1%). 3. Is there a difference between Brazilian and US companies in this respect?

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Our study provided additional support to the Preston 2004 model, by validating again the questionnaire and constructs and high consistency with the results of that research, providing additional evidence to the robustness of the model. Further research would be required for the analysis of the model in other segments, like public administration, smaller companies, also taking into account the continuously changing of the IT organization and its management. REFERENCES Alavi, M; Leidner, D. (2001) Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues. MIS Quarterly v.25(1):107-133 Allinson, C et al. (2001) The effects of cognitive style on leader-member exchange: A study of manager-subordinate dyads. Journal of Occupational & Organizational Psychology v.74 (2):201-221. Armstrong, C. (1995) Creating business value through information technology: The effects of the chief information office and top management team characteristics. College of Business. Tallahassee, Florida, Florida State University. Armstrong, C. Sambamurthy, V. (1999) Information Technology assimilation in firms: The influence of senior leadership and IT infrastructures. Information Systems Research v.10(4):304-328. Boynton, Andrew et al. (1992) Whose responsibility is IT management. Sloan Management Review v.33(4):32-39. Byrne, D. (1971) The attraction paradigm. New York, Academic Press. Chan, Y. (2002) Why Haven't We Mastered Alignment? The Importance of the Informal Organization Structure. MIS Quarterly Executive v.1(2):97-112. Daft, R (1987) et al. Message equivocality, media selection and manager performance. MIS Quarterly v.11(3):355-366. Denzau, A; North, D. (1994) Shared mental models: Ideologies and institutions. Kyklos v.47(1):3-32. Earl, M; Feeny, D. (1994) Is your CIO adding value? Sloan Management Review v.35(3):11-21. Enns, H et al. (2003) CIO lateral influence behaviors: Gaining peer's commitment to strategic information systems. MIS Quarterly v.27(1):155-176. Feeny, D et al. (1992) Understanding the CEO/CIO relationship. MIS Quarterly v.16(4):435-449. Finkelstein, S; Hambrick, D. (1996) Strategic Leadership: Top Executives and Their Effects on Organizations. Minneapolis, MN, West Publishing Company. Finneran, M. (2003) The end of hubris: IT doesn't matter. Business Communications Review v.33(7):2-3. Grover, V et al. (1993) The chief information officer: A study of managerial roles. Journal of Management Information Systems v.10(2):107-131.

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Hambrick, D. (1994) Top management groups: A conceptual integration and reconsideration of the team label. Research in Organizational Behavior v.16:171-215. Hambrick, D; Mason, P. (1984) Upper echelons: The organization as a reflection of its top managers. Academy of Management Review v.9(1):193-206. Henderson, J; Venkatraman, N. (1999) Strategic alignment: leveraging information technology for transforming organizations. IBM Systems Journal v.38(2/3):472-485. Hodgkinson, G; Johnson, G. (1994) Exploring the mental models of competitive strategists: The case for a processual approach. Journal of Management Studies v.31(4):525-552. Karimi, J; Gupta, Y. (1996) The congruence between a firm's competitive strategy and information technology leader's rank and role. Journal of Management Information Systems 13(1):63-89. Kim, D. (1993) The link between individual and organizational learning. Sloan Management Review v.35(1):37-51. Lederer, A; Burky, L. (1988) Understanding top management's objectives: A management information systems concern. Journal of Information Systems v.3(1):5067. Lederer, Albert; Mendelow, Aubrey.(1987) Information resource planning: Overcoming difficulties in identifying top management's objectives. MIS Quarterly v.11(3):388-400, Leonard, J; Seddon, P. (2012) A Meta-model of Alignment, Communications of the Association for Information Systems: v 31, Article 11. Madhavan, R; Grover, R. (1998) From embedded knowledge to embodied knowledge: New product development as knowledge management. Journal of Marketing v.62(4):113. Mohammed, S et al. (2000) The measurement of team mental models: We have no shared schema. Organizational Research Methods v.3(2):123-166 Monge, P et al. (1985) The dynamics of organizational proximity. Management Science v.31(9):1129-1142. Nahapiet, J; Ghoshal, S. (1998) Social capital, intellectual capital, and the organizational advantage. Academy of Management Review v.23(2):242-266 Nelson, K; Cooprider, J. (1996) The contribution of shared knowledge to is group performance. MIS Quarterly v.20(4):409-433. Orpen, C. (1984) Attitude similarity, attraction, and decision-making in the employment interview. Journal of Psychology v.117(1):111-121. Peterson, E et al. (2000) Collective efficacy and aspects of shared mental models as predictors of performance over time in work groups. Group Processes & Intergroup Relations v.3(3):296-317. Preston, D. (2004) Shared Mental Models between the Chief Information Officer and Top Management Team: Towards Information Systems Strategic Alignment, Unpublished PhD Thesis, The University of Georgia, Athens.

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Preston, D; Karahana, E. (2009)How to Develop a Shared Vision: The Key to IS Strategic Alignment. MIS Quarterly Executive 8(1) Rasker, P.; Post, W. (2000) Effects of two types of intra-team feedback on developing a shared mental model in command and control teams. Ergonomics v.43(8):1167-1190. Reich, B; Benbasat, I. (1996) Measuring the linkage between business and information technology objectives. MIS Quarterly v.20(1):55-62. Reich, B; Benbasat, I. (2000) Factors that influence the social dimensions of alignment between business and information technology objectives. MIS Quarterly v.24(1):81-114. Richards, D. (2001) Coordination and shared mental models. American Journal of Political Science v.45(2):259-267. Rockart, J et al. (1996) Eight imperatives for the new IT organization. Sloan Management Review v.38(1):43-56. Sabherwal, R; Chan, Y. (2001) Alignment between business and IS strategies: A study of prospectors, analyzers, and defenders. Information Systems Research v.12(1):11-34. Sabherwal, R et al. (2001) The Dynamics of Alignment: Insights from a Punctuated Equilibrium Model. Organization Science v.12(1):179-197. Schrage, M. (1996) Organizational charts really do matter. Computerworld v.30:3334. Smaltz, D. (1999) Antecedents of CIO effectiveness: A role-based perspective. College of Business. Tallahassee, Florida, Florida State University. Stephens, C et al. (1992) Executive or functional manager? The nature of the CIO's job. MIS Quarterly v.16(4):449-468. Swaab, R et al. (2002) Multiparty negotiation support: The role of visualization's influence on the development of shared mental models. Journal of Management Information Systems v.19(1):129-150. Tallon, P; Pinsonneault, A, (2011) Competing Perspectives on the Link between Strategic Information Technology and Organizational Agility; Insight from a Mediation Model, MIS Quarterly, v35(2): 463-486 Van den Bosch, F; Volberda, H. (1999) Coevolution of firm absorptive capacity and knowledge environment: Organizational forms and combinative capabilities. Organization Science v.10(5):551-569. Van der Vegt, G. (2002) Effects of attitude dissimilarity and time on social integration: A longitudinal panel study. Journal of Occupational & Organizational Psychology v.75(4):439-453. Wagner, W. G et al. (1984) Organizational demography and turnover in top management groups. Administrative Science Quarterly v.29:74-92. Watson, R. (1990) Influences on the IS manager's perceptions of key issues:Information scanning and the relationship with the CEO. MIS Quarterly v.14(2):217-232 Weill, P. (1990) Strategic investment in information technology: An empirical study. Information Age v.12(3):141-148. Young, M; Buchholtz, A. (2002) Firm performance and CEO pay: Relational demography as a moderator. Journal of Managerial Issues v.14(3):296-314.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.521-540 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300004

METAMODEL OF THE IT GOVERNANCE FRAMEWORK COBIT João Souza Neto Arthur Nunes Ferreira Neto Catholic University of Brasilia, Brasília/DF, Brazil __________________________________________________________________________

ABSTRACT This paper addresses the generation and analysis of the COBIT 4.1 ontological metamodel of IT Governance framework. The ontological metamodels represent the logical structures and fundamental semantics of framework models and constitute adequate tools for the analysis, adaptation, comparison and integration of IT best practice frameworks. The MetaFrame methodology used for the construction of the COBIT metamodel is based on the discipline of conceptual metamodeling and on the extended Entity/Relationship methodology. It has an iterative process of construction of the metamodel’s components, using techniques of modeling and documentation of information systems. In the COBIT 4.1metamodel, the central entity type is the IT Process. The entity type of IT Domain represents the four domains that group one or more IT processes of the COBIT 4.1. In turn, these domains are divided into one or more Activities that are carried through by one or more Roles which are consulted, informed, accounted for or liable for each Activity. The COBIT 4.1 metamodel may suggest adaptation or implementation of a new process within the framework or even contribute to the integration of frameworks, when, after the processes of analysis and comparison, there are connection points between the components and the logical structures of its relationships. Keywords: COBIT, Metamodels, Entity/Relationship, IT Governance, IT framework.

_____________________________________________________________________________________ Manuscript first received/Recebido em 23/01/2012 Manuscript accepted/Aprovado em: 01/07/2013 Address for correspondence / Endereço para correspondência João Souza Neto, Doctor of Science in Electrical Engineering, University of Brasilia – UNB, Professor at Catholic University of Brasilia, on the Master’s degree Program in Information Technology and Knowledge Management, Campus Avançado, SGAN 916 Asa Norte - Modulo B - Sala A121 - CEP:70.790-160 Brasília – DF, Brasil Telefone: (61) 3448-6534 - E-mail: joaon@ucb.br. Arthur Nunes Ferreira Neto, Master in Information Technology and Knowledge Management – MGCGI/UCB, Catholic University of Brasilia, Researcher at Catholic University of Brasilia in Metamodels of IT frameworks, Campus Avançado, SGAN 916 Asa Norte - Modulo B - Sala A111 - CEP: 70.790-160 Brasília – DF, Brasil Telefone: (61) 3338-6534 - E-mail:arthurnetobsb@gmail.com. Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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INTRODUCTION

According to the IT Governance Institute (2005), "the survival and success of an organization on the new global market, where time and distances were suppressed, depend on the effective management of information and related technologies." In this context, where IT (Information Technology) plays a decisive and strategic role within the organizations, models of IT best practices frameworks have emerged in the last two decades. These frameworks are a response of business owners to the challenges posed by IT governance and management, working as tools for the promotion of the alignment between the IT processes and the strategic objectives of the organization. According to Johannsen and Goeken (2007), the IT best practices frameworks "describe organizational objectives, processes and aspects of the IT management and control of IT". The effective implementation of an IT best practice framework is a complex activity that demands planning and managing and it usually induces significant changes in the organization and in its processes. Thence, the challenge arises to deeply understand the structure of the framework so that a preliminary study of its suitability to the organization's processes can be made. Furthermore, it has been observed that the adoption of only one of these IT best practice frameworks may not be sufficient for a particular organization. Despite the different foci and the conceptual and structural differences, IT best practice frameworks, in principle, are not incompatible, and they can be used concomitantly to promote an improvement in the organizationâ&#x20AC;&#x2122;s IT management. Therefore, one of the challenges currently faced in IT management is how to analyze, adapt, compare, and integrate different IT best practice frameworks. Consequently, it is understood that the first step towards solving these problems is understanding the logical structures and the generating semantics of the IT best practice frameworks. This can be achieved through the methodical generation of ontological metamodels (models of models) of these frameworks. The basis for this proposition is that the ontological metamodels represent, from a higher level of abstraction, the conceptual components and the rich logical structure and semantics of the relationships of the IT best practices frameworks and, at the same time, they enable the adaptation, comparison and integration among different IT frameworks. Among the main approaches used, up to now, in order to carry out the analysis and comparison of IT best practice frameworks, there are the high-level classifications based on diverse criteria of comparison and the high-level detailed mapping of the functions and processes among the frameworks (ITGI, 2006, 2008). However, only the application of these two approaches does not significantly contribute to the solution of comparing the IT best practice frameworks problem. The high-level classifications based on comparison criteria are not detailed enough to detect correspondences or incoherencies among different areas of the IT frameworks. On the other hand, the detailed mapping of the functions and processes of the IT best practice frameworks shows a high level of detail, but it presents little available information for understanding the conceptual and logical structures which are important for the planning and the effectiveness of the integration. This paper, in an effort to fill this gap, used the MetaFrame methodology, which comprises procedures, strategies and instructions for creating ontological-type metamodels for these IT best practice frameworks. (Ferreira Neto, 2010). This methodology is then applied for the generation of the COBIT 4.1 framework.

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2. THEORETICAL REFERENCE 2.1 Metamodels Definitions The managing of elements in an organization increasingly uses more and more complex models, tools, and environments of modeling. For Karagiannis (2002), the state of the art in the area of organizational modeling is based on metamodels. A literal analysis about the meaning of a metamodel may start with the prefix “meta”. In Greek, “meta” means “that which is beyond”, “that which encompasses”, “that which supersedes”, “that which transcends”, etc. According to the open consortium of the OMG (Object Management Group), responsible for the MDA (OMG, 2003) and UML (OMG, 2004) specifications, a model is an instance of a metamodel, which implies that a metamodel is a model of another model. An important contribution to the studies which were developed concerning the subject of this paper was provided by Atkinson and Kühne (2003a and 2003b), who identified two dimensions of metamodeling that generated two distinct forms of instancing of the metamodel objects (linguistic and ontological). One dimension is related to the definition of the language and it uses the linguistic instantiation, employed, for example, in MDA architecture, the basis of UML language. Another dimension concerns the definition of the domain or type of object and uses the ontological instancing employed in the creation of the metamodel of the COBIT framework in this study. Both forms occur simultaneously and serve to precisely locate an element of the model in the linguistic-ontological space. Figure 1 uses the OMG-MDA architecture with four layers of abstraction (M0 to M3), also followed by UML2.0 and MOF 2.0 linguistic modeling standards. There is the visualization of a linguistic metamodel with four horizontal layers that starts with M 0, denoting the lowest level, and M3, the highest level of abstraction. At the same time, there is the visualization of the ontological metamodel, represented by different areas separated by a dashed line in the vertical division at the M1 level. By expliciting the two metadimensions, Figure 1 also illustrates the relationship between the elements of the model and the real world. The dog and the lamp (mental concept) of the M0 level are the elements of the real world to be modeled. The real Lassie is “represented” by the object Lassie and not by an ‘instance of’ Collie. The abstraction level M1 contains the first level of abstraction of an object in the real world, together with the type of which the object is an ontological instantiation. The Lassie object (O0) is an ontological instantiation of the type Collie (O1). From M1 each level is a model expressed in the language defined at the higher level. In M2, the Lassie object is a linguistic instantiation of the Object type, which, in M3, is a linguistic instance of the Class type.

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Figure 1: The Linguistic Metamodel (Adapted from Atkinson and Kühne, 2003b) The ontological metamodels employ the ‘instance of’ relationship to relate the concepts to their types or metatypes. In Figure 2, the ontological levels were extended by rotating Figure 1 to the right, and adding level O2.Therefore, the ontological metalevels are arranged horizontally. For Atkinson and Kühne (2003b), the two points of view are equally valid and useful.

Figure 2: The Ontological Metamodel (Adapted from Atkinson and 2003b). According to Atkinson and Kuhne (2003b), despite the validity and utility of the ontological metamodels of types, the tool builders and members of the standardizing consortia, such as the OMG, the metamodel term refers typically only to the metamodel of the linguistic type. Meanwhile, from the perspective of the user of the language, the hierarchy of types formed by ontological levels is much more relevant. In other words, the ontological metamodels are metamodels for the users focused on the content and the linguistic metamodels are a standard of metamodels focused on forms.

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Researcher Strahringer (1996) studied how the level hierarchies of the models are built and coined the term ‘metaization principle’ to designate an operation that is repeatedly applied from a level to another, or rather, the primary mechanism of abstraction to structure the objects in levels of hierarchy. Kühne’s analysis (2006) is similar to Strahringer’s (1996), but it uses a different distribution of the elements for the levels and a diverse terminology. The MetaFrame methodology (Ferreira Neto, 2010) utilizes the metaization principle in order to verify and inform users how the metamodel components of the COBIT framework were built. The most used metaization principle in information systems is the linguistic metamodeling. For instance, the syntax of the languages of modeling is at the M2 level, such as the well-known E/R (Entity/Relationship) methodology by Chen (1976) that is applied to represent part of the objects in the real world (M0) at the level of an E/R (M1) model, where only the components of the language (types, entity, relationship types, attributes etc.) can be used. Based on this principle, a M2 level structures the representation of the objects at the M0 level in the M1 level. In the ontological metamodeling, metatypes at the Mx level are defined and they describe the concepts that exist at the Mx-1 level. 2.2 Metamodels Principles and Instructions Schütte (1998) is one of the authors who contribute to this research work through the modeling instructions contained in GoM (Guidelines of Modelling). The GoM is a framework for the development and evaluation of conceptual models composed of six general principals, described as follows: 1. Construction Adequacy Principle: There must exist a consensus among specialists and users on what type of a model construction is adequate for the problem and its proposal. 2. Language Adequacy Principle: the language used to create the metamodel fulfills its proposal. This principle refers to the completeness and the consistency between the model and the metamodel. This means that the model should not possess any symbol or item that has not been specified in the metamodel. 3. Economic Efficiency Principle: this principle formulates economic restrictions on the task of modeling. The costs of developing of a model should not surpass the gains of its use. 4. Clarity Principle: this principle deals with the comprehensibility and expressivity of the model. Within the objectives of clarity, there are the hierarchical decompositions, the formatting (arrangement of the elements) of the model and the filtering of information. Criteria and objectives of the quality of the graphic formatting of a model were defined by Tamassia (1988). 5. Systematic Conception Principle: this principle deals with the consistency of the construction among the models and it is also important for the integration of the models. 6. Comparability Principle: this principle deals with the semantic comparison between two models according to their correspondence or similarity. This is one of the most important principles in a metamodelling environment. Metamodels are frequently used to compare and integrate models.

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Goeken (2009) proposes the use of the principles defined by Sch端tte (1998) to also evaluate the metamodels. The author adds three new specific instructions to evaluate the quality of the metamodels: Instruction 1: a metamodel reveals its metaization principle. It is important for the metamodel user to know which rules were utilized to construct the metamodel levels. Instruction 2: a metamodel should possess a clear mapping between the universe of the discourse and the words and symbols that name and describe them. There should not exist doubts among users concerning the meaning of concepts in the metamodel. Instruction 3: a metamodel must have rich semantic connections. The relationships among the metamodel components must be relevant and described in an expressive way. The metamodels created from the MetaFrame methodology should be verified concerning the principles and instructions described. 2.3 Applications of the Metamodels The ontological metamodels can be applied in order to complete the analysis, adaptation, comparison and integration of the IT Governance frameworks. Once the components of the metamodels are extracted, the frameworks can be examined and analyzed so that the characteristics of their structure are known. This analysis contributes to the evaluation of the framework and also in helping the implementation and adaptation within the organization. Other possibilities related to the application of the IT Governance frameworks metamodels are the comparison and integration with different frameworks. Using the same methodology for the construction or, according to Strahinger (1996), the same metaization principle, the representation of the metamodels allows the comparison between the frameworks at a higher or abstract level. This comparison process is an important step towards the integration of the frameworks. The integration of the metamodels can guide the integration of the frameworks at a lower or concrete level. 2.4 Extensive E/R Methodology The Entity Relationship E/R methodology, proposed by Chen (1976), was developed for the creation of conceptual and semantic models. The metamodels constructed with the MetaFrame methodology, presented in this study, follow the concepts and the notation of an extension of the E/R methodology, formalized by Engel et all (1992), with the objective of improving metamodel expressiveness. Figure 4 presents the main components and their notation, according to the authors cited above.

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Figure 3: Components and notation of the extended E/R methodology. Adapted from Engels et all (1992). Depending on the quantity and complexity of the objects (entity types, relationship types, attributes, and constructor types), the use of a modeling strategy is important to help in the organization and development of the work of finding and defining the metamodel components. One modeling strategy for the extended E/R methodology is a sequence of steps that repeat themselves, producing small transformations of the initial model in the final model. The choice of the strategy for the construction of the model is influenced by the main source of information of the modeling process. The literature shows that there are four types of basic modeling strategies (TopDown, Bottom-Up, Inside-Out or Middle-Out and Mixed). However, there is no consensus among the authors on which of these is the best technique. The works of Heuser (1998) and Atzeniet (1999) are used to describe these strategies. In the TopDown strategy, an initial model is created in which the most abstract concepts (â&#x20AC;&#x2DC;from aboveâ&#x20AC;&#x2122;) are represented first. Afterwards, intermediary models are gradually created through the refinement of the concepts into more specific concepts. The Bottom-Up strategy (from below to above) is the inverse of the Top-Down strategy (from above to below). It consists in starting with the most elementary and detailed concepts to construct more abstract and complex concepts. The Inside-Out strategy (from inside to out) or Middle-Out strategy (from the middle out) consists in starting with the considered most important or central concepts (from inside), and then

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gradually adding peripheral concepts related to them (to outside). The Mixed strategy is a combination of the other strategies. None of the modeling strategies presented above is universally accepted. The authors recommend the use of a certain strategy or a combination of them, starting with the specific information. Figure 5 shows some sources of information and recommendations on strategies to be used.

Figura 4: Modeling strategies by source of information. Source: the authors. The complexity of the model depends on the types of sources of information and on the quantity of the entity types to be represented. Therefore, in more complex models, with more than 20 types of entities, various strategies are usually used at the same time. In these cases, a higher level model is divided so that each partition can be modeled separately. 2.5 The COBIT 4.1 Framework The COBIT 4.1 (Control Objectives for Information and related Technology) is a guide for IT management and governance, organized to ensure that the use of IT resources are effectively aligned with the organizationâ&#x20AC;&#x2122;s business strategies. According to ITGI, the COBIT's mission is "to research, develop, publish and promote a control framework for the governance of Information Technology that is updated and internationally accepted for adoption by organizations and is used in a day-to-day basis by business managers, IT professionals and auditors" (ITGI, 2007). It is probably the most widely used reference framework for IT governance (SIMONSSON e JOHNSON, 2006a), risk mitigation and value delivering through IT (RIDLEY et al, 2004; DEBRACENY, 2006). The conceptual model of COBIT 4.1 is represented by a cube whose faces are interrelated, as shown in Figure 5.

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Figure 5 –The Cube of COBIT 4.1. Source: ITGI, 2007. To better understand the model, the IT Process dimension is organized in a structure with four domains, as follows: Planning and Organization – it focuses on strategy and tactics so that IT may actually contribute to the business goals of the organization; Acquisition and Implementation - the focus is on the implementation of the IT strategy. In this domain the solutions are identified, developed, acquired, implemented and integrated with business processes; Delivery and Support –focusing on issues related to the delivery of services, including routine operations, security, continuity and training; and finally Monitoring and Evaluation - its goal is to regularly assess the IT processes from a quality and compliance point of view according to control requirements. These four domains include thirty-four processes and these processes comprise two hundred and ten activities. On the other side of the cube, there are Business Requirements. According to the model proposed by COBIT 4.1, in order to satisfy business objectives, information needs to conform to certain criteria such as effectiveness, efficiency, confidentiality, integrity, availability, compliance, and reliability. Finally, the third dimension links characteristics related to the IT resources, which are: Applications, Information, Infrastructure and People, to previous dimensions. The areas of focus for the IT governance, according to the COBIT 4.1, are presented in the pentagon illustration shown in Figure 6 (ITGI, 2007).

Figura 6 – IT Governance Areas of Focus. Source: (ITGI, 2007) At the Pentagon, one can identify the strategic alignment, which aims to ensure consistency between the organization's strategic goals and the IT objectives; the value delivery, which is linked to the delivery of products or services with appropriate quality, time and cost that allows to achieve the objectives previously agreed upon; the risk

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management, which refers to the treatment of uncertainties and to the value preservation; the resource management, which aims to ensure the capacity to support the activities required by the business, optimizing costs and other available resources, and, finally, the monitoring of the performance of IT activities with the purpose of ensuring the management of the entire environment. To meet managerial control and measurement ITâ&#x20AC;&#x2122;s needs the COBIT 4.1 provides guidelines for the thirty-four IT processes which contain assessment and measurement tools for the IT environment of the organization including maturity model, critical success factors, key goal indicators and key performance indicators for each process (GREMBERGEN, 2004). 3. RESEARCH METHOD The survey, according to Gil (2002), is a "formal and systematic development of the scientific method. The fundamental objective of the research is to find answers to problems by employing scientific procedures." Moresi (2004, p.30) adds that "research is a reflective and critical procedure for seeking answers to problems not yet solved." The research is classified according to the research methodology that will be employed. In this work it was used used the classification of Vergara (2000), for whom the research can be classified according to its purposes or goals and the means of research or technical procedures. Regarding its purposes or goals, this research is classified as a methodological and applied research. The research methodology is the study related to the development of instruments to capture or manipulate reality. Therefore, it is associated with paths, shapes, manners, and procedures used to reach a determined purpose. The research is applied to solve specific problems, more immediate or not. Therefore, it has a practical purpose, unlike pure research that is motivated primarily by the intellectual curiosity of the researcher and is set mainly at the speculation level. As to the means of research or to the technical procedures, this research is classified as bibliographical. The bibliographical research may be defined as the development of a systematic study based on materials published in books, articles/papers, periodicals, electronic networks or, in other words, material that is accessible to the general public. Although it provides analytical tools for any type of research, it can also be an end in itself. The published material may come from a primary or secondary source. Table 1 summarizes the classification of this research.

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Table 1: Classification of this research according to Vergara (2000). Categories

Tipos

Justificativa

Methodological

Development of a methodology for building meta-frameworks of IT best practices (MetaFrame).

Applied

Several practical applications of the methodology and results of the research in organizations and professional applications: metamodels creation, analysis, adaptation, comparison and integration of frameworks of IT best practices.

Bibliographical

Search of the best methodologies, strategies and guidelines for the creation of the methodology for this research. Use of the frameworks official guides for gathering and analyzing data.

Purposes or goals

Means of investigation or technical procedures

4. METHODOLOGY In order to develop the COBIT 4.1 metamodel, a collection, depuration, organization, analysis and presentation of data was made. The ITGIâ&#x20AC;&#x2122;s three official COBIT 4.1 guides were used as sources of information (http://www.isaca.org/Knowledge-Center/COBIT). The process of data collection of official documents is similar to the data survey technique of systems analysis for the modeling of information systems. The Extended Entity/Relationship methodology, by Engels et all (1992), was used, combined with the conceptual modeling strategies for the organization and analysis and representation of the data according to the following types: entity type, relationship type, attribute type and constructor type. The final purpose of this data survey was to develop the conceptual metamodeling framework. All of the procedures described above are included in the methodology named MetaFrame, which was created by Ferreira Neto (2010), and it describes a detailed process of creation and verification of the quality of the metamodels of IT best practices. The objective of the MetaFrame methodology is to ensure the quality of the metamodel and create useful products such as metamodel data dictionaries to be used in the applications of metamodels, as, for example, in the comparison and integration of frameworks. 4.1 The MetaFrame Methodology The aim of this methodology is to create a metamodel framework of IT best practices based on the collecting and analyzing of data contained in the official guides of the IT best practices framework. The methodology comprises an iterative construction process of the metamodel components using modeling techniques and documentation of information systems, thus determining the verification of the results based on quality criteria.

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The metamodel documentation, generated by the MetaFrame methodology, is important for the analysis, adaptation, comparison and integration of the IT frameworks as it contains a data dictionary with the definitions of the components represented. Phase 1 of the Metaframe methodology comprises the preparation of the study. In this phase, the objectives are defined, the professionals are selected and their roles are assigned and the training and the distribution of support materials for the participants are performed. Phase 2 is the execution phase, where the metamodel data collection and the iterative construction and documentation processes of the metamodel are carried out using modeling techniques. Phase 3 verifies the quality of the metamodel according to the principles and instructions presented in the 2.2 item as well as the correction and updating of the documentation generated by the methodology. A summary of the methodology is presented in Figure 7.

Figure 7: Metaframe Methodology for the creation of IT metamodel frameworks. At the end of the verification phase of the MetaFrame methodology, the results or products will be ready to be disclosed within the organization or published outside of it. The metamodel and the explanatory summary should be released together so that the users will have no questions as to the components represented. After the release of the metamodel, the team responsible for its development may receive questions from the users, as well as suggestions for the improvement and the implementation of the metamodel. It is suggested that the members of the team that developed the metamodel work meet to analyze the issues and suggestions from the users and to take the necessary actions. It is also important that the team discuss what was learned from the creation of the metamodel, based on the MetaFrame methodology. 5. RESULTS AND DISCUSSIONS

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5.1. Building the COBIT 4.1 Metamodel The steps to build the ontological metamodel of COBIT 4.1, according to the Metaframe methodology are presented in this item. The beginning of the job to create a metamodel corresponds to Phase 1 of the MetaFrame methodology, named Preparation. This phase consists of the following stages: the reading the ISACAâ&#x20AC;&#x2122;s official guides for the COBIT 4.1such as the COBIT 4.1 Manual, the COBIT 4.1 Control Practices and IT Assurance Guide, Using COBIT 4.1; the ontological metamodel creation; the metadata dictionary creation;, the database schemas of the metamodel creation and the analysis and customizing of the model. The job of creating the COBIT 4.1 metamodel itself corresponds to Phase 2 of the MetaFrame methodology, named Execution, where the following activities are performed: the data collection, the definition of the metamodel components, the creation of the data dictionary, the creation of the metamodel and the creation of database schemas. In Phase 3 of the MetaFrame methodology, named Verification, the products that are generated, are then examined as to their correctness and quality. The following stages are performed in this phase: the documentation, the metamodel and the database. The diagram of the COBIT 4.1 metamodel is shown in Figure 8.

Figure 8: COBIT 4.1 Metamodel. Source: The authors.

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5.2. Summary of the COBIT Metamodel The ontological metamodel developed in this work represents the conceptual structures that constitute the COBIT 4.1 framework. These concepts are symbolized as entity types (rectangles), relationship types (diamonds), cardinalities (numbers in parentheses), attributes (ellipses), constructor types (triangles) and lines connecting entities to relationships. The explanatory summary, recommended by the MetaFrame methodology in phase 2, stage 4, step 2, intends to give a clear interpretation of the metamodel to the user. The definitions presented here are a selection from the ISACAâ&#x20AC;&#x2122;s COBIT 4.1official guides. In the COBIT 4.1 metamodel, the central entity type is the IT Process. The COBIT 4.1 has thirty-four IT processes that belong to certain domains of IT. The IT Domain entity type represents the four domains that group one or more IT processes of the COBIT 4.1. The COBIT 4.1 processes are divided into one or more Activities. Each Activity of COBIT 4.1 is carried out by one or more Roles that are consulted, informed, accountable or liable for each Activity. Each COBIT 4.1 IT Process considers from one up to seven elements of the Information Criterion entity type as business requirements for information. Each IT Process also uses from one up to four elements of the IT Resource entity type (applications, people, information and infrastructure). An IT Process also supports from one up to five elements of the IT Governance Focus Area entity type. Each IT Process requires and delivers one or more elements of the Input and Output entity type, containing results (documents, actions, etc.) of the COBIT 4.1 IT processes or of external processes. Each COBIT 4.1 IT Process is evaluated according to a specific Maturity Model. The Maturity Model entity type provides a maturity profile for each process based on a rating of just six elements of the Maturity Level entity type. An IT Process defines one or more elements of the Goal entity type. A Goal entity type of the COBIT 4.1 represents the following entity types: Business Goal, IT Goal, Process Goal or Activity Goal. One Goal is measured by one or more elements of the Metric entity type. A Metric in the COBIT 4.1 represents the Key Goal Indicator or Key Performance Indicator entity types. A COBIT 4.1 IT Process is controlled by one or more elements of the IT Control entity type. The IT Control entity type represents the following entity types: Application Control, Process Control or Detailed Control Objective and it controls a particular IT Process. An IT Control is implemented with one or more elements of the Control Practice entity type. The Control Practice implements only a particular IT Control. A Control Practice is based on one or more elements of the Driver entity type (risk or value). An IT Control is audited by one or more elements of the Control Test entity type which, in turn, audits a specific IT Control. The Control Test entity type represents the Design Test and Result Test entity types.

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5.3. Relevant Issues of the COBIT 4.1 Metamodel During the metamodel creation process some issues have arisen, and they were addressed to in meetings held to discuss and review both the data collection stage and the process of analyzing and defining the components of the metamodel. The COBIT 4.1 metamodel uses four constructor types that aim to optimize the representation of the entity types as well as the relationship types involved. They were formed through the specialization of an input entity type into two or more output entity types. This structure allowed the use of only one relationship type with the input entity type making it easier to understand the metamodel. Another advantage of using constructor types is the decomposition of a more general concept into more detailed concepts which are important for the understanding of the metamodel. An example of the constructor type use was the creation of the IT Control entity type and its specialization in the output entity types: Application Control, Process Control and Control Objective. The three output entity types are examples of controls for IT processes of the COBIT 4.1. They come up together in COBITâ&#x20AC;&#x2122;s Control Practices and IT Assurance Guide Using COBIT that are related to the control practices and the audit tests, respectively. Another issue of the construction of the COBIT 4.1 metamodel was the creation of the Business Goal entity type. This type of goal is not present in the IT processes forms in COBIT 4.1 User's Guide, but the goals of activity, process and IT are. As the MetaFrame methodology involves thorough reading of all the official guides for data collection of the metamodel components, significant references to the Business Goal entity type were found externally to the forms of IT processes. In Appendix I of the Handbook of COBIT 4.1, there are tables containing the seventeen business goals suggested by ISACA and related to IT processes. The COBIT 4.1 presents a RACI chart for each IT process containing IT activities and the type of role (R-Responsible, A-Accountable, C-Consulted, I-Informed) for each process stakeholder. The metamodel represents the type of relationship "is performed by" between an Activity entity type and a Role entity type. The responsibility of each role was considered as an attribute of the relationship because it depends on the elements of the two entity types at the same time. The responsibility is dependent of the Activity and Role entity types as shown in Figure 9. The attribute responsibility, as well as other attributes of the metamodel entity types, appears in the diagram of the complete metamodel, printed on a page large enough to hold all the components. However, in cases where the attribute is indeed important for the comprehension of the metamodel by the users, a given atribute may be included in the metamodel drawing.

Figure 9: Representation of the Relationship Attribute

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One issue that sparked the debate among the participants of the meeting was the creation of the Input and Output entity type. The COBIT 4.1 provides for each IT process one table with the entries for the process, including the external inputs and another for the results or outputs of the process. Both inputs and outputs of the processes can be in the form of actions, documents, etc. Instead of creating two entity types, one for the input and another for the output, it was decided to create a single entity type as the elements of the entity type are of the same type. In order that the metamodel demonstrates the two types of relationship of the Input entity type and the Output entity type with the IT Process entity type, two verbs were used for naming the relationship type. One verb expresses the relationship with the inputs of the process and another verb expresses the relationship with the outputs of the process. Therefore, it is clear to the user of the metamodel what the scope of the relationship between the two entity types is. Reading the metamodel from the left to the right, the relationship is described as "requires and delivers", i.e., an IT process requires one or more inputs and also delivers one or more outputs of the Input entity type and the Output entity type. Another important issue discussed by the participants was the representation of the maturity model of the COBIT 4.1. The COBIT 4.1 framework has a maturity model for each IT process. This model was based on the maturity levels of the CMM (Capability Maturity Model) developed by the SEI (Software Engineering Institute), although it has different goals. The maturity model of the COBIT 4.1 is not meant to accurately assess the level of the process maturity. The maturity model of the COBIT 4.1 fosters the creation of a maturity profile for the IT process by evaluating the process evolution stage with each of the six levels of the maturity model. 5.4. Validation of the COBIT 4.1 Metamodel Table 2 shows the validation of the COBIT 4.1 metamodel based on the principles defined by SchĂźtte (1998) for evaluating metamodels plus the guidelines defined by Goeken (2009). This table also shows that the generated metamodel fully meets all quality requirements set by these two authors.

Table 2: Validation of the COBIT 4.1 Metamodel Principles(P) /

Fulfillment

Guidelines(G) P1 - Adequacy of construction

The use of ontological metamodels to portray the COBIT 4.1 essential concepts and structures was adequated.

P2 - Adequacy of language

The purpose of the metamodel is suitable for the language used for the COBIT 4.1 metamodel does not include other symbols or different items from those already present in the model, i.e., there is consistency between the model and the metamodel.

P3 - Economic efficiency

The ontological COBIT 4.1 metamodel sustains this principle because it does not need any extension or modification in the language used, therefore it does not require an additional development for the organization.

P4 â&#x20AC;&#x201C; Clarity

This principle is fulfilled by the guidelines and principles used in the metamodel creation, for example, the quality goals and criteria of the graphical formatting.

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P5 â&#x20AC;&#x201C; Systematic Design

This principle deals with the construction consistency between the metamodels. This principle is covered by the systematic creation of the metamodels of IT best practices frameworks through the use of the MetaFrame methodology.

P6 â&#x20AC;&#x201C; Comparability

This principle handles the semantic comparison between two models according to their similarity or correspondence. This principle is met because the metamodels created using the MetaFrame methodology are comparable as they have in their documentation a metamodel data dictionary that allows a more effective comparison of the concepts presented.

O1 - Revelation of the Metaization Principle

This guideline is attained through the revelation that the type of the COBIT 4.1 metamodel is the ontological one and that the language components of the extended E/R methodology (rectangles - entity type, lozenges - relationship type etc.), used to represent the metamodel, are named according to the essential or primary concepts of the model, i.e., according to the concepts that classify the model.

O2 â&#x20AC;&#x201C; Clear Mapping

The metamodel of the COBIT 4.1 meets this principle because the MetaFrame methodology demands the creation of an explanatory summary of the metamodel so the users may clearly understand the concepts used. Although those concepts are known to the users of the model, they may not be known to other professionals of the IT management area

O3 - Having rich semantic connections

This guideline is followed by the COBIT 4.1 metamodel, which is created according to the MetaFrame methodology because only the most significant relationships that express important concepts contained or created from the model are used. For every relationship there are two expressions naming the type of each relationship, depending on the direction in which the entity types are read. The names of the relationships are extracted from the official guides, with rare exceptions.

6. CONCLUSION AND FUTURE RESEARCH This paper aims at presenting the COBIT 4.1 metamodel and it was used to analyze the overall structure of the framework. Comparing the treatment followed here with other approaches on the subject, such as that defined by Goeken (2009), it is important to emphasize that the development of the COBIT 4.1 metamodel was started from the so called MetaFrame methodology, and not from the use of a simple conceptual modeling devoid of standard procedures that prevent the repetition of the modeling by others. Furthermore, it is worth noting the fact that the MetaFrame methodology requires strict adherence to the official documentation of the model under study. In other approaches, it remains clear the differencesbetween the conceptualization of the official documents and what is described by the author. In future research, it is also possible to use metamodels as a methodological support for adapting or customizing frameworks to the processes and structures of an organization. For example, the COBIT 4.1 metamodel may suggest how to adapt or implement a new process into the framework by displaying the associated entity types and relationship types. This means that the metamodel, having a rich conceptual framework and their relationships, becomes a guide for the changes to be made in the framework, since its essential characteristics are respected. One may also compare the IT best practices frameworks using metamodels, which can be quite useful for analyzing possible feature additions. This can be done using the

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documents generated by the MetaFrame methodology, in particular, the metamodel data dictionary with all its components and their descriptions, types, relationships etc. The metamodel dictionary generated by the MetaFrame methodology is a prerequisite for comparing the structures of two or more frameworks and, also, for addressing the issue of synonyms and homonyms concepts. The metamodels of the IT best practices frameworks can also contribute to the integration of frameworks. Here, the term integration is used in the context of creating a common area between two frameworks, despite keeping, at the same time, the characteristics of each one. After the processes of analysis and comparison, the connection points between components and the logical structures of their relationships are identified. Then, it is possible to construct a new metamodel displaying an integration area containing the components of the frameworks that were integrated. Entity types such as processes, activities, resources, products etc., are present in most of the IT best practice frameworks with similar meanings and attributes. Other components, despite having different names, have the same meaning and can also be integrated. The metamodels may also contribute to the fusion of different IT frameworks. The term fusion refers to the creation of a new framework starting from the existing ones. This situation occurs when it is requested that one framework complements another, what may occur through the embodiment of the more specific framework into the structure of the framework displaying a wider scope. The fusion process also depends on the analysis and comparison of the frameworks. After this step, a new framework will arise from the introduction or adaptation of existing concepts or by creating new concepts consistent with the frameworks of origin.

REFERENCES Atkinson, C., and Kühne, T. (2003a), Model-Driven Development: A Metamodeling Foundation, IEEE Software, vol. 20,no. 5, pp. 36-41. Atkinson, C., and Kühne, T. (2003b), Calling a Spade a Spade in the MDA Infrastructure, International Workshop Metamodeling for MDA, York. Atzeni, P., Ceri, S., Paraboschi, S., Torlone, R. (1999), Database Systems Concepts, Languages and Architectures. McGraw-Hill. Chen, Peter, P.S. (1976), The Entity-Relationship Model: Towards a Unified View of Data, ACM Transaction on Database Systems, vol. 1, nº1, pp. 9-36. Debreceny, R. Re-engineering IT Internal Controls: Applying Capability Maturity Models to the Evaluations of IT Controls. Proceeding of the 39nd International Conference on Systems Engineering Research, Hawaii, 2006. Engels, G., Gogolla, M.,Hohenstein, U., Hulsmann, K. (1992), Conceptual Modelling of Database Applications Using an Extended ER Model. North Holland, Amsterdam, pp. 157-204. Ferreira Neto, A. N. F., Metamodelos Ontológicos de Frameworks de Melhores Práticas de TI (2010). Disponível em:

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http://www.bdtd.ucb.br/tede/tde_busca/arquivo.php?codArquivo=1282. Acesso em: 8mar 2011. Gil, Antônio C. Como elaborar projetos de pesquisa. 4ª Ed. São Paulo: Editora Atlas, 2002. Goeken M., Alter S. (2009), Towards Conceptual Metamodeling of IT Governance Frameworks Approach - Use - Benefits, hicss, 42nd Hawaii International Conference on System Sciences, pp.1-10. Grembergen, W. Strategies for information technology governance. Idea Group Inc., 2004. Heuser, C. A. (1998), Projeto de Banco de Dados, 6ª edição. ISBN: 979-85-7780-382-8. Editora Bookman. IT Governance Institute. COBIT 4.1 (2005). Disponível em: http://www.isaca.org/Knowledge-Center/COBIT/Pages/Downloads.aspx. Acesso em: 1 Fev 2011. IT Governance Institute: COBIT Mapping: Overview of International IT Guidance (2006), 2nd Edition, ISBN 1-933284-31-5. IT Governance Institute: COBIT® 4.1. Framework Control Objectives Management Guidelines Maturity Models (2007). IT Governance Institute COBIT® Mapping: Mapping of ITIL V3 With COBIT® 4.1 (2008), ISBN 1-933284-31-5. Johannsen, W., Goeken, M. (2007). Referenzmodelle für IT Governance. verlag GmbH, Heidelberg. Karagiannis, D., and Kühn, H. (2002), Metamodeling Platforms. In A. Min Tjoa, & G. Quirchmayer (Eds.), Lecture Notes in Computer Science: Vol. 2455. Proceedings of the Third International Conference EC-Web, Springer, pp. 451-464. Kühne, T. (2006), Matters of (Meta-) Modelling, In Journal on Software and Systems Modeling, Volume 5, Number 4, pp. 369-385. Moresi, E. A. D. Metodologia de Pesquisa. Brasília-DF: Universidade Católica de Brasília-UCB, mar. 2004. OMG (2003). MDA Guide Version 1.0.1 Version 1.0.1, OMG document omg/03-06-01. OMG (2004).UML-Unified Modeling Language Infrastructure Specification, Version 2.0, Version 2.0, OMG document ptc/03-09-15. Ridley, G.; Yo Ung, J. e Carroll, P. COBIT and Its Utilization: A Framework from the Literature. Proceedings of the 37th International Conference on System Sciences, Hawaii 2004. Schütte, R., Rotthowe, T. (1998). The Guidelines of Modeling- an approach to enhance the quality in information models. In Ling, Ram, Lee (Eds.) Conceptual Modeling – ER 98. Singapore, 16.-19.11.98, pp. 240-254. Simonsson, M. e Johnson, P. Defining IT Governance – A consolidation of Literature. Department of Industrial Information and Control Systems. Royal Institute of Technology (KTR), 2006.Disponível em <http://www.ics.kth.se/Publikationer/Working%20Papers/EARP-WP-2005-MS04.pdf>. Acesso em 05/02/09.

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Strahringer, S. (1996).Metamodellierungals Instrument des Methodenvergleichs, Shaker Verlag, Aachen. Tamassia, D.; DI Battisti, G.; Batini, C.(1988): Automatic graph drawing and readability of Diagrams. IEEE Transactions on Systems, Man and Cybernetics, 18 1, S. 61-79. Vergara, Silvia Constant, (2000) Projetos e Relatórios de Pesquisa em Administração. 3ª ed. São Paulo: Atlas.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.541-560 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300005

UNDERSTANDING ORGANIZATIONAL MEMORY FROM THE INTEGRATED MANAGEMENT SYSTEMS (ERP) COMPREENDENDO A MEMÓRIA ORGANIZACIONAL A PARTIR DOS SISTEMAS INTEGRADOS DE GESTÃO (ERP) Gilberto Perez Universidade Presbiteriana Mackenzie, São Paulo/SP, Brazil Isabel Ramos Centre Algoritmi, University of Minho, Braga, Portugal __________________________________________________________________________

ABSTRACT With this research, in the form of a theoretical essay addressing the theme of Organizational Memory and Integrated Management Systems (ERP), we tried to present some evidence of how this type of system can contribute to the consolidation of certain features of Organizational Memory. From a theoretical review of the concepts of Human Memory, extending to the Organizational Memory and Information Systems, with emphasis on Integrated Management Systems (ERP) we tried to draw a parallel between the functions and structures of Organizational Memory and features and characteristics of ERPs. The choice of the ERP system for this study was made due to the complexity and broad scope of this system. It was verified that the ERPs adequately support many functions of the Organizational Memory, highlighting the implementation of logical processes, practices and rules in business. It is hoped that the dialogue presented here can contribute to the advancement of the understanding of organizational memory, since the similarity of Human Memory is a fertile field and there is still much to be researched. Keywords: Human Memory, Memory Organizational, Information System, ERP.

_____________________________________________________________________________________ Manuscript first received/Recebido em 01/02/2013 Manuscript accepted/Aprovado em: 28/07/2013 Address for correspondence / Endereço para correspondência

Gilberto Perez , Mestre (2003) e Doutor (2007) em Administração pela Universidade de São Paulo. Na Universidade Presbiteriana Mackenzie atua como Coordenador e Pesquisador do Núcleo de Estudos em Estratégia e Inovação - NEPEI - Universidade Presbiteriana Mackenzie, Rua da Consolação, 930, São Paulo 01302907 - São Paulo, SP – Brasil E-mail: gperez@mackenzie.br Isabel Ramos, Centre Algoritmi, University of Minho, Braga, Portugal, E-mail: iramos@dsi.uminho.pt Acknowledgements: This paper is funded by: “FEDER funds through the Operational Program for Competitiveness Factors, COMPETE and Portuguese Funds through FCT - Foundation for Science and Technology under the Project: FCOMP-01-0124-FEDER-022674 and MackPesquisa - Mackenzie Research Fund”. Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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RESUMO Com esta pesquisa, no formato de ensaio teórico abordou-se o tema da Memória Organizacional e os Sistemas Integrados de Gestão (ERP), buscando apresentar alguns indícios de como este tipo de sistema pode colaborar para a consolidação de algumas funcionalidades da Memória Organizacional. A partir de uma revisão teórica sobre os conceitos da Memória Humana, com extensão à Memória Organizacional e Sistemas de Informação, com ênfase nos Sistemas Integrados de Gestão (ERP), procurou-se estabelecer um paralelo entre as funcionalidades e estruturas da Memória Organizacional e as funcionalidades e características dos ERPs. A escolha do sistema ERP para este estudo deveu-se à complexidade e escopo abrangente deste sistema. Pôde-se constatar que os ERPs suportam de forma adequada algumas funções da Memória Organizacional, com destaque à implementação das lógicas, processos, práticas e regras vigentes de negócio. Espera-se que o diálogo aqui apresentado possa contribuir para o avanço do entendimento da Memória Organizacional, visto que à semelhança da Memória Humana, é um campo fértil e ainda existe muito a ser pesquisado. Palavras-chave: Memória Humana, Memória Organizacional, Sistema de Informação, ERP.

INTRODUCTION

To assess whether an organization can be understood as a system, to which the concepts of memory are likely to be applied, has become a challenge for researchers of organizational theories. Perhaps, this is considered a preposterous claim by scholars of the humanities. However, if the claims of the General Systems Theory (TGS) (Bertalanffy, 1975) are observed, an organization can be conceptualized as a system because it is based on open systems as they relate to the environment (various stakeholders); presents perspectives to organize itself as a whole and is able to implement a holistic view. It is clear that the cybernetics has enabled the development of TGS, as well as the operationalization of ideas that converged at a theory of systems applied to management. To cybernetics is also associated the use of Systems and Information and Communication Technologies, widely used in the integration and exchange of information within the organization and with the environment. Likewise, studies in psychology, philosophy and sociology contributed substantially to the evolution of the concepts of memory and understanding of the complex mechanisms involved in its operation. Based on these approaches, the initial proposition proves to be quite promising and studies on Organizational Memory begin to appear, but there is much still ahead. For a proper understanding of the functioning of the Organizational Memory, scholars of organizational theories "borrowed" basically the same concepts and meanings of human memory and applied them to their studies within organizations. It then becomes necessary to understand that these meanings and implications should be explained so that it is possible to assess whether in fact they apply to organizations and how they apply.

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In its essence, the memory is related to one of the central concepts of the theory of information processing. In turn, the information is a valuable resource for organizations and sometimes, it generates competitive advantage. Organizational Memory is related to the accumulation of socially constructed solutions to the problems of the past and that are often found within organizations (Ackerman & Halverson, 2004). In practice, the Organizational Memory influences in various ways individuals and areas that are part of it. This is the case of decisions made by managers, who rely on information and knowledge that the organization is able to store and recover in due course in information systems. The decisions influence the results of the organization and determine its future. Thus, organizational memory is somehow tied to the effectiveness and performance of organizations. One can then infer that organizational memory is somehow related to the use of available systems, often very expensive, as is the case for Enterprise Resource Planning Systems (ERP), since this is a system widely used by organizations thanks to the range of functions it incorporates, its modularity and integration of data and information from various areas that make up the organization in a single database. Since the Organizational Memory shows up as a fertile field of research while challenging, the purpose of this essay was to better understand its mechanisms of operation, associating them with the Information Systems (another fertile research field), in particularly with Enterprise Resource Planning Systems (ERP), given the complexity and scope of such systems, which has as one of its main purposes, the preservation of organizational memory. Before the case presented, it was formulated the following research question: How can Enterprise Resource Planning Systems (ERP) contribute to consolidate the Organizational Memory? Its overall objective was to determine how ERP systems can somehow assist in the consolidation of organizational memory. 2. METHODOLOGICAL CONSIDERATIONS ABOUT THE ESSAY Although the established essayists position themselves on not having the need to adopt a methodology in the preparation of an essay, it was decided to maintain this section, which aims to present the reader with some concepts and the uniqueness of the theoretical essay, as well as to clarify the choice of this type of text. It was understood that the logic of argument of an essay should also be present in its structure. Medeiros (2000: 112) refers that the essay "is a methodological display of performed issues and original conclusions that have been reached after careful examination of an issue." He emphasizes further that the test should take part problematically, anti-dogmatically, and that it should stand the critical spirit of the author, as well as originality. An interesting approach to the essay and that served as a reference for the elaboration of this work is presented by Meneghetti (2011: 321): "Unlike the traditional method of science, in which the form is considered more important than the content, the essay requires subjects, essayist and reader, able to assess that the understanding of reality can also occurs in other ways ".

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Besides the theoretical study, another guiding aspect of this essay was its multidisciplinary approach, in this case, the Organizational Memory and Information Systems. Therefore, by not introducing the empiricism of traditional papers, it is hoped that the dialogue and reflections presented here can somehow entice the reader into a further reflection and, perhaps, to continue the discussion herein initiated.

3. THEORETICAL REFERENCIAL This chapter presents an overview of the evolution of the concepts of Human Memory, extending the concepts of Organizational Memory and Information Systems, with emphasis on ERPs. 3.1 Evolution of the concepts Memory and Human Memory The field of memory studies is multidisciplinary and combines intellectual currents of several areas, including (but not limited to) anthropology, education, literature, history, philosophy, psychology and sociology (Roediger & Wertsch, 2008). According to those authors, philosophers have written about memory problems since 2500 years ago and psychologists have studied empirically the questions related to memory for over 125 years. The memory is an important and complex cognitive process, which can be defined as a process consisting of three mechanisms: storage, retention and access. While those mechanisms are considered sequential, they are, in fact, interdependent. That is, how the content has been stored can influence the retention, the access depends on which types of retention are activated, and so forth (Baddeley, 1999). The memory can be natural or artificial. As Simon (1955) states, information can be stored in the natural memory or stored in an artificial memory in the form of documents, books, notes, decisions, knowledge, processes, etc. This type of memory assumes a representative role for organizations in the form of Information Systems. In organizations, the decision maker can use the natural memory whenever she/he runs into a problem already experienced. However, she/he can use the artificial memory to access files, databases, and records and other typo of information about how a past decision influenced the organization, so they are useful in solving new similar problems. Over time, various models have been proposed to study human memory. It is a theme constantly revised in view of the findings in the areas of neuroscience, progressively more accessible due to the increasing sophistication of research methods in the area. A model commonly adopted, based on neuropsychological research, shows how memory can be divided into two basic types: declarative and non-declarative (Sternberg, 2008). Moreover, memory is defined in two ways: by retention time and by its contents (Davidoff, 2001; Gazzaniga, Ivry & Mangun, 2006). There are also proposals that human memory can be explained by a connectionist model that shows the activation of parallel processing. The criticism that is made to this model point out that it fails to explain mechanisms for recalling single episodes, for example (Sternberg, 2008). What can be said is that human memory is maintained by various cognitive and neural systems, different in terms of quality of the

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information stored and how it is encoded and evoked. It relates to emotions, to learning mechanisms and suffers losses associated to the human development (Oliveira, 2007). From what has been presented so far, to develop a unique model of human memory presents itself as a relatively difficult task. One justification for this is that the knowledge about human memory is evolving fast mainly by the contribution of Psychology and Neuroscience. However, a model (Figure 1) developed by Alan Baddeley - Professor of Psychology - is widely accepted by these two scientific communities. Figure 1: Representation of Human Memory

Source: Adapted from Baddeley et al.(2009)

Observing the model in Figure 1 reveals that human memory consists of three other memory types, namely: 1) Sensory memory (very fast and retains the stimuli received) 2) Working Memory (stores information that will be the basis for reasoning and learning) 3) Long Term Memory (information to be used indefinitely). Together, these memories enable humans to adapt to their environment, to achieve the proposed goals, knowledge integration and patterns maintenance â&#x20AC;&#x201C; a human ability that accelerates the interpretation of new events based on past experiences. Recent studies in neuroscience indicate that human memory has some constructive features (Schacter & Addis, 2007). A practical example of this capability occurs when presenting to a group of people, for a certain period of time, a list of words related to a given context, eg: tired, bed, awake, sleep, dream, night, blanket, napping, sleep, snoring pillow, yawning, peace and sleepy. After finishing the session, when asked participants to recognize a few words; some participants correctly identify the word pillow, some confirm that the door was not present; however, some respondents cite words that were not on the original list, but they were associated with the initial context, for example, the word sleep. Similarly, a system based on constructive principles can extract, recombine and reassemble events that never occurred. This system will occasionally produce memory errors, but it can

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also produce results with sufficient flexibility (Schacter & Addis, 2007). One clue comes from studies indicating that memory errors can present evidence of an adaptive functioning, rather than faulty processes. 3.1.1 Considerations about the study of Human Memory According Dudai, Ill Roediger & Tulving (2007, p 1), "a new science around the memory is developing before our eyes." According to the authors, this science comes true resting on the shoulders of giants, such as: psychology, neurobiology and brain research, computer science and philosophy. Each of these disciplines contributes a distinct vocabulary of terms and acronyms, interconnected to some degree or form in generic features and conceptual frameworks. In the case of computer science the contributions include Neural Networks, Genetic Algorithms, Artificial Intelligence Systems and systems of Fuzzy Logic. Since the studies of memory comprehend multiple disciplines, methods and used techniques, they can also be quite diverse. Those studies include basic research in the humanities, the careful examination of primary historical sources and documentary studies as well as case studies, interviews, questionnaires and eyewitness reports of the social sciences (Tulving, 2007). In psychology and neuroscience, real experiments are sometimes used (Cesar Perez, Vidal & Marin, 2010). It is expected that different types of inferences can be made from various applications of these techniques. One challenge we see for the future of memory studies as a discipline is to develop a set of strict and systematic methodologies that provide a wide range of possibilities for analysis (Roediger & Wertsch, 2008). For scholars of the science of memory to be able to properly explore the topic and to benefit from this rich multidisciplinary methods and results, they should strive to understand the language and modus operandi of researchers from other disciplines and/or sub-disciplines (Dudai, Roediger ill & Tulving, 2007). For the authors, such an understanding is a sine qua to the success of this challenge that is to study memory. No doubt this is a great opportunity for students of computer science, given the development of cybernetics in recent decades. Thus, systematize and improve the methodological foundations for studies in the field are prerequisites for progress on cumulative memory. Thus, both quantitative and qualitative methodological approaches rigorously developed by researchers in the humanities and social scientists, as applicable in other specific areas of study, will also be applicable to studies of human memory (Roediger & Wertsch, 2008). A similar approach can be taken in relation to the theoretical and conceptual questions. The field of memory studies needs to develop theoretical perspectives unique to withstand the critical issues of the field (Roediger & Wertsch, 2008). Scholars interested in studies of memory and collective memory, often uncritically borrow terms of studies of human memory (Wertsch, 2002). According to the author, it is necessary to adopt well-defined criteria, because such approaches are often the best simplifications, the best and the worst caricatures. As seen so far, studies of human memory, present as a complex field and the wide variety of approaches that can be used, make it difficult to use a general theory for explaining a given phenomenon linked to memory. Thus, in addition to the careful choice of methods to be used, it becomes necessary to use appropriate cutouts or

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theoretical approaches, such as those presented by neuroscience and computer science, which are the case of this theoretical essay. 3.2 The Organizational Memory, an Evolving Concept Historically, the concepts of Organizational Memory (OM) followed the concepts related to human memory, which indicates that human memory has been used as a metaphor to refer to the organizational memory, even if implicitly. Given the difficulty presenting a model for human memory, it was expected that the same difficulty occurred in the representation of organizational memory, since, in theory, it should provide functions similar to human memory. Researchers of organizational memory (Walsh & Ungson, 1991; Morgeson & Hofmann, 1999; Nevo et al., 2008 & Rowlinson et al., 2010) argue that organizations need to know what they already know, to use this knowledge in the present decisions and thus project the future. In addition, some authors argue that information about the past can be stored by organizations in multiple ways (Douglas, 1986; Kantrow, 1987). When researchers of the organization science have adopted the term memory, they imported the same meanings associated to the concept of human memory and applied them to organizations. However, these meanings and implications should be explained so that it is possible to understand if in fact they apply to organizations. Thus, the "memory" remains one of the central concepts of the theory of information processing. However, the understanding of these concepts is still incipient, particularly in theories of organizations (Walsh & Ungson, 1991; Nevo et al., 2008). The challenging issue is the implementation of the concepts of human memory for the study of organizational memory. This is why, although their basic structures are completely different, which are trying to see whether the same features occur in both. The use of metaphors allows the researcher to establish a bridge between two different concepts in nature, but similar in their functions. Thus, its importance is closely linked to the development of systems capable of capturing what should be archived, to categorize stored knowledge representations, to establish mechanisms that facilitate the connection of these contents to human knowledge, favoring the creation of new knowledge, to facilitate the process of knowledge sharing and to allow for the recovery of knowledge representations for decision and human action support. In a seminal work, researchers Walsh & Ungson (1991) presented a model representative of the structure of organizational memory, trying to relate it to a set of information deemed useful for decision making, and which is stored in containers, or organizational bins, as represented schematically in Figure 2. Containers (retention facilities) are mechanisms of memory retention, which transform information into something different, such as: knowledge, processes, experience, shared understandings, routines, etc.

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Figure 2: Organizational Memory Structure

Source: Adapted from Walsh & Ungson (1991)

The borders and the center of the organizational memory structure proposed by Walsh and Ungson (1991) represent: Information Acquisition: actions that relate to information on decisions and solved problems, and constitute the basis of organizational memory over time (Walsh & Ungson, 1991). Information Retention: The information and decisions can be stored in different locations, such as: individuals, adopted procedures, protocols, furniture arrangements, technological devices, etc. Pondy and Mitroff (1979) simplified the explanation and argued that the possibilities for storage of information are similar to "brains and paper". Information Retrieval: in the day-to-day organizations, a lot of information used by individuals in their analyses are retrieved from organizational memory. Such retrieval can occur in a controlled manner, or automatically (Langer, 1983). It should be noted, that in the model of Walsh and Ungson (1991), in the structure of organizational memory (Figure 1), the retention of information is a function of (Memory Containers): Individuals, Culture, Transformation, Organizational Structure and Ecology. Although the authors speak on information, it is important to emphasize that the individuals, culture, structure, transformation, ecology and information are converted into knowledge, shared knowledge and knowledge representations. The authors attribute some properties related to information and retained decisions, as seen in Table 1.

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Table 1: Properties of Retained Information Who

What

When

Where

Why

How

Individuals

E/R

Culture

E/R

Transformation

Structure

R R

Ecology

Note: E = stimuli Decision / Information, R = Organizational Responses Source: Walsh and Ungson (1991)

Walsh and Ungson (1991: 61) define organizational memory as "the information stored by the history of an organization that can influence the present decisions of the organizations". However, because it was a seminal work, which is still regarded as a classic by the authors, who cited it over 300 articles, it is also natural that the model has been object of much criticism. Zwass and Stein (1995) extend the concept of organizational memory by including the effectiveness element. The authors argue that organizational memory is the way in which the knowledge acquired in the past can influence the business activities of the present, thus resulting in a higher or lower level of organizational effectiveness. Systems and information technologies are widely used tools by modern organizations for this purpose (Perez & Zwicker, 2010). For Stein and Zwass (1995), the basic organizational memory consists of cognitive elements (memory content); the authors define organizational memory as a process based on the acquisition, retention, maintenance and restoration, as shown in Figure 3. Figure 3: Process of Organizational Memory

Source: Stein & Zwass (1995)

The first criticism of the model of Walsh and Ungson (1991) came about due to the static nature of the model proposed by the authors. In other words, the view being limited to the acquisition, retention and retrieval of information simplifies too much the model for organizational memory. Thus, authors such as Kuutti & Bannon (1996), claim that organizational memory should not be conceptualized as a single repository, but as a

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dynamic process that integrates reconstructions functions enabling the recall of past experiences. Corbett (2000) argues for a dynamic view of the structure of organizational memory, which should take into account the social nature of this memory. For the author, rather than seeing the memory as knowledge stored in containers, organizational memory should be seen as a continuous process of construction and reconstruction by the interaction between humans and their organizational environment. Meanwhile, the definition given by Ackerman and Halverson (2004) indicates that organizational memory can be understood as the accumulation of socially constructed solutions to the problems of the past and that are frequently found by the organization. A new approach to the organizational memory takes into account that it should not systematically present an organizational design geared only towards the needs of the moment, but it must consider the imaginative reconstruction of the past as an essential factor to plan for the future (Rowlinson et al. 2010). Among other aspects, Nevo et al., (2008) argue that the model of Walsh & Ungson (1991) is adequate to support research efforts in the area of Information Systems and Technology. The basic assumption is that information technology can be used to create a uniform, complete, consistent, updated and integrated set of knowledge that can be made available to decision-making processes at all levels of the organization. The processes of Organizational Memory involving the acquisition, preservation, search, maintenance and recovery are faster and more accurate when automated by Organizational Memory Information Systems (OMIS) (Nevo & Wand, 2005). Within organizations, these systems began with large databases of complex information, having evolved later to more distributed systems developed according to the principles of the Theory of Transactive Memory (Brandon & Holligshead, 2004: Lewis & Herndon, 2011). In this approach, information systems are tools to connect information repositories and to make them available for groups and individuals, as repositories of knowledge, enabling the interconnection of distributed repositories across the organization into an integrated memory. The concepts coming from systems theory are corroborated by some researchers of organizational theories (Morgeson & Hofmann, 1999; Nevo et al., 2008), which add to the organizational memory concepts, features related to repositories of information, processes and decisions, which can be redeemed for problem solving and present situations. Other authors (Feldman & Feldman, 2006; Ramos & Carvalho, 2008; Rowlinson et al., 2010; Ramos, 2011; Ramos & Levine, 2012) added new facets and critical theories of organizations, introducing concepts that help the understanding of organizational memory, associating it with the reconstruction capability of organizations. One possibility that presents itself for the representation of a model for organizational memory is to use the model of Baddeley et al. (2009). In line with the authors of these studies and researches on the cultural, communicative and political memories (Barnier, Sutton, 2008; Hirst, Manier, 2008), it is possible to propose a new model for representing organizational memory through the juxtaposition with the model of human memory. Ramos (2011) presents a model (Figure 4) in which the memories mentioned above are presented as organizational concepts equivalent to the Baddleyâ&#x20AC;&#x2122;s working and long-term memories, and the political memory enclosing forces that shape the trajectory of collective knowledge through the various sub-memories of the model. JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 541-560

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Figure 4: Representative Model of Organizational Memory

Source: Ramos (2011), based on: (Assmann, 1995; Barnier et al., 2008; Hirst & Manier, 2008)

Each memory type shown in Figure 4 stores different types of knowledge (Hirst, Manier, 2008, Rowlinson et al. 2010). Thus, the sensory memory is a shorter memory for which an equivalent organizational term has not yet been found. This memory retains the impressions of the environment, the events occurred in the interaction with the environment of the organization, after the original stimuli ceased. The communicative memory is the one that results from the sharing of individual experiences, transforming them into organizational knowledge; cultural memory retains organizational knowledge for long periods of time, giving rise to a collective identity built on the experiences that are part of the history of the organizations. As seen previously, the concepts of organizational memory have evolved fast. It is observed in Figure 5, from containers storing information to organizational memory, possessing complex processes, coming finally to the concepts of distributed and reconstructive capabilities of the organizational memory. As previously stated, despite this progress, much remains to be done in order to understand the mechanisms of organizational memory.

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Figure 5: Evolution of Concepts of Organizational Memory

Information Systems are now key elements of organizational memory, in that they enhance the retention, sharing and application of representations of individual and collective knowledge. More specifically ERPs can be seen as tools to enhance organizational memory, facilitating and bringing new ways to implement the processes of capture, retention and application of organizational knowledge. 3.3 Information Systems The decision maker can have access to information on all aspects and areas of your organization by using information systems, since systems are present in the day-today of managers and organizations (Perez & Zwicker, 2010). Several different definitions of Information Systems (IS) can be identified in the literature. To Moraes (2007), SIs are computer applications with the main purpose of providing information to certain users at different levels of expertise, ranging from the operational level to the strategic level. According to Turban, Rainer and Potter (2007), an SI collects, processes, stores and disseminates information for a specific purpose and considers hardware, software, database, network, procedures and people as basic components of an IS. To Laudon & Laudon (2011), the SI components are related to each other, working together to collect, process, provide information to the decision systems and / or processes, coordinating, controlling, analyzing and visualizing the internal processes of the organization. Moreover, the SI contains information about people, places and significant items for the organization or the environment that surrounds it, besides producing activities that organizations need to make decisions, control operations, analyze problems and create new products and services. According to Laudon & Laudon (2011) and Turban, Leidner, McLean, & Wetherbe (2010), companies are investing in IS and IT to achieve six organizational goals: operational excellence; new products, services and business models; close relationship with customers and suppliers; improved decision making; competitive advantage; survival. SIs provide important tools to improve the efficiency of business operations and enabling them to achieve greater profitability (Laudon & Laudon, 2011). For O'Brien & Marakas (2008), in conceptual terms, the SI in the real world can be classified in several different ways. Some types of the SI, for example, can be classified as either operations management systems or as management information systems (GIS). We can classify information systems in terms of the number of people in an organization who use them. Regarding the typology, Nickerson (2007) presents five types of information systems that are most commonly used: Individual Information Systems: affect the way a single individual works; Information Systems for Working Groups: affect groups of individuals working together and often make use of networked computers;

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Organizational Information Systems: affect a large number of people in an organization. Such systems typically operate on large computers that are used by multiple individuals at the same time; Inter-Organizational Information Systems: systems used by various organizations simultaneously. These systems operate on computers located in different organizations and are connected by inter-organizational networks; Global Information Systems: systems that operate in organizations located in more than one country, which are connected by global networks of greater amplitude.

3.3.1 Decision Support Systems Decision Support Systems (DSS) are SIs that provide interactive information to managers and business professionals during the decision-making process. These systems use analytical models, specialist database, opinion and perception of the decision maker and an interactive computer-based modeling (O'Brien & Marakas, 2008). According to Gordon and Gordon (2006), the complete DSS consist of four major components: database, knowledge base, decision models and a user interface. Laudon & Laudon (2011) defend the idea that the DSSs help middle managers make non routine decisions, focusing on specific issues that change quickly and for which there is no default resolution procedure. Second (Nickerson, 2007; O'Brien & Marakas, 2008; Laudon & Laudon, 2011), usually several types of information systems for use as decision support are found in organizations. Here are some examples: Management Information Systems: supporting the decision makers providing varied information in the form of reports or responses to searches in the database. These systems help managers in decision making, providing information from a database, with little or no analysis; Decision Support Systems: help managers in decision making, analyzing data from a database and providing test results to the manager; Executive Support Systems: are designed to meet the specific information needs of strategy managers, and; Expert Systems: unlike previous systems that only help managers in decision making by providing and analyzing information, an expert system provides specific answers to the decision maker. The functions of the decision support systems are basically the same as of those of any other information system, ie: input, processing, storage and output. These systems have been used with increasing frequency in various enterprises in several sectors, such as financial, automotive, retail, and insurance, among others. Expert systems are just one of the applications of Artificial Intelligence in the organizational world. Other applications that became common in the business world and which are derived from Artificial Intelligence are: Neural Networks, Learning Systems, Intelligent Agents, Genetic Algorithms and Fuzzy Logic (Fuzzy Logic) (Nickerson, 2007; O'Brien & Marakas, 2008; Laudon & Laudon, 2011).

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3.3.2 Intelligent Systems One category of information systems that is gaining more and more importance within organizations is intelligent systems able to mimic human capabilities of learning and knowledge assessment. The main techniques and methodologies for the development of these systems are: Knowledge Acquisition, Machine Learning, Neural Networks, Fuzzy Logic, Evolutionary computation, Agents and Multi-Agents and Data Mining (Rao, 2003). Such systems have become able to solve complex problems. Intelligent systems encompass Knowledge Based Systems (KBS) and Expert Systems (ES). Knowledge-based systems are computer programs that use knowledge representations to solve problems. Thus, they are able to manipulate knowledge and information in an intelligent way and are designed for use in problems that require a considerable amount of human knowledge and expertise (Rao, 2003). 3.3.3. Enterprise Resource Planning Systems - ERP Enterprise Resource Planning Systems or Enterprise Systems (ERP) are designed to integrate all functions of a company. O'Brien & Marakas (2008) define cross-functional ERP systems as guided by an integrated set of software modules that supports the basic internal processes of a company. As for Gordon and Gordon (2006), ERPs (Figure 6) integrate different activities within or outside the company, support multiple languages and currencies and help companies integrate their operations dispersed across various locations and business units. Figure 6: Typical Representation of an ERP

Source: Elaborated based on Gordon & Gordon (2006) and Oâ&#x20AC;&#x2122;Brien & Marakas (2008)

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ERPs are used to integrate business processes in the areas of manufacturing and production, finance and accounting, sales and marketing and human resources into a single software system (Laudon & Laudon, 2011); in this sense, they are packages of process applications supporting standardized business processes, providing business visibility though integrated and consolidated information in a database for different areas of an organization in real time (Decoster, 2008). In addition to providing reliable information in real-time, the implementation of an ERP system can generate significant socio-cultural changes in organizations, one of the most relevant, the impact on power relations due to the possibilities of increased visibility and access to information by the users (Elmes, Strong & Volkoff, 2005). According to Turban et al. (2010), the main objective of ERP is to integrate all departments and information flows in a company into a single computer system that meets all the needs of the company. Some key features of an ERP are: Modularity; Scope; Integration of the various areas of the company; Uniformity and Standardization of Information; Customization Capability; Incorporation of best practices; Quality of information; Functional openness; besides Guaranteed evolution of the solution. Companies that have invested heavily (planning and funding) in the implementation of an Enterprise System as an ERP, more than trying to eliminate the dependency on legacy systems also seek to use it as a kind of backbone, connecting it with other emerging systems with emphasis on CRM (Customer Relationship Management), SCM (Supply Chain Management), Collaboration Systems and Business Intelligence. 4. RELATING ORGANIZATIONAL MEMORY AND ERP On one hand, researchers of organizational memory often combine their research to theories of information processing (Walsh & Ungson, 1991; Morgeson & Hofmann, 1999; Ackerman & Halverson, 2004; Nevo et al., 2008; Rowlinson et al., 2010), on the other hand, some authors in the area of Information Systems and Technologies (Chou and Cheng, 2006; Kiu & Lee, 2009; O'Donovan et al., 2010) also concentrate efforts to assess the implications of information systems in the organizational memory, and vice versa. Among the solutions provided by the systems and information technologies currently used by companies, the modern data warehouses provide similar functionality to the acquisition, retention (storage and retrieval), among which: the organization of data in accordance with the norms and standards of the company so that they can be used for the analysis of managers and decision making, a range of standardized query tools, analytical tools and facilities through reports and graphs; availability of data for access by any user in the organization, as needed (Laudon & Laudon, 2011). Some applications of information systems and technologies currently available can be deployed in organizations, in order to provide solutions for the access to information, improve communication and action / interaction support that are related to processes characteristic of organizational memory (Fraidin, 2004; Vaast & Walsham, 2005). Some examples of these applications are given in Table 2, highlighting the ERP.

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Table 2: Applications that Support the Processes of Organizational Memory Perception CRM

Monitoring

Memory

ERP

Reaction

Reason

X X

Colaborative

X X

Systems Datawarehouse E-Learning

X X

Knowledge Systems Document Management Systems

X X

Source: Adapted from Fraidin, 2004; Vaast & Walsham, 2005.

In addition to the applications listed in Table 2, the associations between ERPs and organizational memory extend to other aspects, since this type of system interconnects people and areas of the organization, which is directly related to the collective and dynamic memory (Rowlinson et al. 2010). With ERPs the logic, processes, practices and rules in business can also be implemented (Medeiros Jr., 2007), which follow in line with Corbett (2000), which added to the dimension of process to the organizational memory. A single database ERP can be related to the external database model of Walsh and Ungson (1991) as it focuses the information throughout the organization. This relationship can be defined as the support to the organizational memoryâ&#x20AC;&#x2122;s ability to recover details of past decisions, which were acquired and stored on devices, repositories or containers, so that they can be applied to present and future decisions. Another relevant approach with respect to ERP and organizational memory relates to the culture of a particular institution, which strengthens the relationships with all types of stakeholders, and reinforces forms of power. Thus, that user or group of users that makes the best use of the information, and performs their tasks more efficiently and effectively, also exercised power through decision making and access to better information, thereby increasing their visibility in the organization (Elmes, Strong & Volkoff, 2005). As pointed out by O'Donovan et al. (2010), the implementation of complex systems such as ERPs involves the modification and adaptation of the organizational memory, particularly in the case of information and knowledge repositories, as well as the transformation of the relationships between individuals, groups and areas of the organization which now use the ERP, seeking to add value to the company, and especially for the customer. With the implementation of the ERP, the entire process that was spread through several areas without proper documentation and often located in people's minds, in the form of tacit knowledge, becomes integrated in a standardized way, eliminating discrepancies, redundancies and inconsistencies identified as gaps of organizational memory (van Stijn & Wensley, 2001). The authors argue that the ERP not only covers a

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broad functional scope, supporting many different business processes, but also incorporates many different aspects of organizational memory. Given its scope and complexity, there are many benefits that can be obtained from the use of an ERP. However, its implementation is still complicated and difficult, no matter the size or segment of the organization. The system meets the various internal functional areas and extends to the external agents such as customers, suppliers, government and strategic partners, each one with their peculiarities of organizational memory. 5. FINAL CONSIDERATIONS It is clear that an integrated management system as the ERP is not the only type of system that can somehow be related to organizational memory, but it is certainly one of the systems that are best suited to the specificities of organizational memory, because of its complexity and breadth and also by the range of features that the system provides to users and groups that are part of an organization. Another important aspect to consider is that system manufacturers will hardly develop and deliver to market a specific system for organizational memory, ie, an Organizational Memory Information System (OMIS), as described by Nevo & Wand (2005) since several features are already present in systems offered to the market, including ERP systems, widely used by organizations of various sizes and segments. However, the dynamics inherent in the organizational memory are not always reflected in ERPs, due to a bad implementation, to failures in customization and even to its misuse. Such problems may involve difficulties in acquiring information, in information retrieval in the form of knowledge representations, in the storage of information in external files, in the settings made on the retrieved information and in the diverse needs in decision making. Thus, at the end of this essay, it is proposed that other studies attempting to relate the ERP to new approaches to organizational memory, such as memory disorders that are similar to the human memory, also exhibits loss of information and knowledge, inappropriate use of information, rework, and consequently, resulting in wrong decisions and loss of organizational performance.

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Ramos, I. & Levine, L. (2012) Organizational Memory: a preliminary model based on insights from neuroscience. In Gmunden Retreat on NeuroIS 2012 Proceedings, Gmunden, Austria, June 3-6,2012. Rezende, S.O. (2003) Sistemas Inteligentes – fundamentos e aplicações. São Paulo: Manole. Ramos, I. (2011) Organizational memory: a neuroscience-based comprehensive model. In 7th Organization Science Winter Conference (OSWC-XVII) on Organizational Memory, Sheraton Steamboat Hotel and Conference Center, Steamboat Springs, Colorado, USA, February 10-13,2011. Roediger, H.L & Wertsch, J.V. (2008) Creating a new discipline of memory studies. In: Memory Studies, v. 1, n. 1, p. 9-22. Rowlinson, M.; Booth, C., Clark, P., Delahaye, A. & Procter. S. (2010) Social Remembering and Organizational Memory. In: Organization Studies, v. 31, n. 1, p. 6987. Schacter, D.L & D.R. Addis (2007) Constructive Memory: the ghosts of past and future, Nature, 445, pp. 27. Simon, A.A. (1955) A behavioral model of rational choice. The Quarterly Journal of Economics, v. 69, n. 1, p 99-118. Stein, E.W. & Zwass, V. (1995) Actualizing Organizational Memory with Information. In: Systems. Information Systems Research, v. 6, n. 2, p. 85–117. Sternberg, R.J. (2008) Psicologia cognitiva. Porto Alegre: Artmed. Van Stijn, E. & Wensley, A. (2001) Organizational Memory and the Completeness of Process Modeling in ERP Systems: Some Concerns, Methods and Directions for Future Research. In: Business Process Management Journal, 7, 3: pp181-194. Tulving, E. (2007) Are There 256 Different Kinds of Memory? In J.S. Nairne (ed.) The Foundations of Remembering: Essays in Honor of Henry L. Roediger, III, pp. 39–52. New York: Psychology Press. Turban, E., Rainer Jr., R.K. & Potter, R.E. (2007) Introdução a sistemas de informação: uma abordagem gerencial. Rio de Janeiro: Campus. Turban, E., Leidner, D.E., Mclean, E.R. & Wetherbe, J.C. (2010) Information Technolgy for management – transforming organizations in the digital economy. New York: John Wiley & Sons. Vaast, E. & Walsham, G. (2005) Representations and Actions: The Transformation of Work Practices with IT Use. In Information and Organization, v. 15, n. 1, p. 65-89. Walsh, J.P. & P. Ungson (1991). Organizational memory. Academy of Management Review, 16(1), pp. 57-90 Wertsch, J.V. (2002) Voices of Collective Remembering. New York: Cambridge University Press.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp. 561-576 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300006

CASH MANAGEMENT POLICIES BY EVOLUTIONARY MODELS: A COMPARISON USING THE MILLER-ORR MODEL Marcelo Botelho da Costa Moraes University of Sao Paulo, Ribeirão Preto, SP, Brazil Marcelo Seido Nagano University of Sao Paulo, São Carlos, SP, Brazil __________________________________________________________________________

ABSTRACT This work aims to apply genetic algorithms (GA) and particle swarm optimization (PSO) to managing cash balance, comparing performance results between computational models and the Miller-Orr model. Thus, the paper proposes the application of computational evolutionary models to minimize the total cost of cash balance maintenance, obtaining the parameters for a cash management policy, using assumptions presented in the literature, considering the cost of maintenance and opportunity for cost of cash. For such, we developed computational experiments from cash flows simulated to implement the algorithms. For a control purpose, an algorithm has been developed that uses the Miller-Orr model defining the lower bound parameter, which is not obtained by the original model. The results indicate that evolutionary algorithms present better results than the Miller-Orr model, with prevalence for PSO algorithm in results. Keywords: Cash Flow, Cash Balance, Treasury, Genetic Algorithms, Particle Swarm Optimization.

INTRODUCTION

The management of the cash available is a constant problem in all types of organizations. This is because of daily cash inflows and outflows, either by operating activities of the company or financial transactions that have been negotiated. So, there is a need to control financial resources in order to obtain the best result for the firm.

_____________________________________________________________________________________ Manuscript first received/Recebido em 20/07/2011 Manuscript accepted/Aprovado em: 08/07/2013 Address for correspondence / Endereço para correspondência

Marcelo Botelho da Costa Moraes, Universidade de São Paulo, Professor Doutor do Departamento de Contabilidade – Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto – FEARP/USP na área de Contabilidade Financeira, Endereço: Av. Bandeirantes, 3.900 – Monte Alegre, Ribeirão Preto - SP - Brasil – 14040-905 E-mail: mbotelho@usp.br Marcelo Seido Nagano, Universidade de São Paulo, Professor Doutor do Departamento de Engenharia de Produção – Escola de Engenharia de São Carlos – EESC/USP, Endereço: Av. Trabalhador Sãocarlense, 400 – Centro, São Carlos – SP - Brasil - 13566-590, Fone: (16) 3373-9380 – Fax: (16) 3373-9425 E-mail: drnagano@usp.br Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

562 Moraes, M. B. Da C., Nagano, M. S.

Thus, the function of cash management has the responsibility to mobilize, control and plan the financial resources of companies (Srinivasan & Kim, 1985). The use of models to support decision making becomes relevant, since they can provide a comprehensive view and optimization, which can hardly be obtained without the use of methodologies for this objective. The use of models in the problem of defining the optimal level of available cash had its origin in the work of Baumol (1952) and Tobin (1956), where the authors start from the assumption that cash balance available may be defined as a commodity in inventory, i.e. a standard good, whose control may be daily, weekly, monthly, etc. depending on the level of temporal detail required by the company. For these authors, the definition of the optimal cash balance follows the form of models to control inventory size, where it is considered the financial resource available as an inventory that has certain costs associated with its origin and maintenance, but also generates benefits indispensable to the firm. The definition of cash balance began to have a quantitative approach in order to promote the optimization of this financial inventory in order to minimize the costs associated with the maintenance or absence of cash available. Later, Miller and Orr (1966) defined cash balance as having an irregular fluctuation, being characterized as a random variable and they propose a stochastic model to manage the cash balance.

1.1 Objectives The study aims to present a comparison between two computational methodologies for determining the policy of cash management, taking as a basis the structure of the model proposed by Miller and Orr. The objective of this research is to develop a management policy of cash balance cash, based on the assumptions of cost minimization by applying genetic algorithms (GA) and particle swarm optimization (PSO) and comparing the results with the traditional Miller-Orr model. To achieve the proposed objective the following quantitative methodology is used: ď&#x20AC; Simulate time series of cash flows, based on assumptions noted in the literature on this topic; ď&#x20AC; Develop computational algorithms based on genetic algorithm and particle swarm optimization which have as an objective function the minimization of maintenance costs (opportunity cost), cash balance and the cost to transfer the case to an alternative investment with high liquidity, as well as the rescue from this investment to cash; ď&#x20AC; Perform experiments with the algorithms developed in the cash flows and comparatively analyze their results, observing advantages and perspectives. Moreover, an optimization algorithm that tests all possibilities of minimum cash will serve as a basis for checking the quality level of the models relative to the Miller-Orr model. 1.2 Relevance Understanding the reasons that lead firms to have the need to maintain cash resources is critical to better financial management. Accordingly, Brealey and Myers (2005) suggest four reasons for the maintenance of cash balance:

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1. Transactions – funds held in cash to fulfill commitments because of the temporal mismatch between the outputs (payments) and inflows (receipts) of money; 2. Precautionary – funds held in cash as maintaining a safety reserve for contingencies; 3. Speculation – funds held in cash to take advantage of opportunities to obtain discounts or favorable applications; and 4. Bank reciprocity – funds held in current accounts to meet the requirements of some banks as compensation. The factors that lead the organization's management to take a decision on the definition of the amount of money to be kept in cash is not so easily understood or performed, as it depends on economic factors such as availability of access to resources in financial markets (credit market or capital market), cost of capital and time involved in negotiating access to resources (Opler et al., 1999), which are the main limiting factors occurring in the cash management. In the Brazilian case, Economática data for the period 2004-2008 indicate that Brazilian firms (non-financial activity) with publicly traded shares obtained a weighted average balance of cash of 8.85% over the period (Table 1). Brazilian Firms % Cash Available (Mean) Standard Deviation Number of Firms

2008

2007

2006

2005

2004

9.10%

11.39%

9.22%

7.49%

6.75%

15.81%

17.35%

16.27%

14.72%

13.87%

567

369

366

350

353

Table 1 – Share of total assets in cash - Brazilian companies (elaborated by the authors, Source: Economática).

1.3 Research Problem Taking into consideration the aspects previously reported, as well as the importance of managing the cash balance, this paper describes and analyzes the following question: Which is the best method between the traditional Miller-Orr model, or the evolutionary genetic algorithm and particle swarm optimization models, to define a policy for managing cash balance, considering the costs involved in maintaining and obtaining cash? As this paper focuses on the qualitative methodology of financial management, so we used the techniques of genetic algorithm and particle swarm optimization in the development of the cash management policies, requiring to introduce the concepts applied to the problem dealt with and the proposed methodology for its resolution.

2 Literature Review Presented below are the theories that provide support for this work, first reviewing the concepts of management the cash balance and further the models of genetic algorithms and particle swarm optimization.

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2.1 Models for Cash Management Cash management models had their origin in the work of Baumol (1952), the author draws a parallel between cash and other business inventories, using an adaptation of the model of inventory management known as economic order quantity (EOQ), which aims to find the best trade-off between advantages and disadvantages of owning inventories. Nevertheless, the EOQ has restrictions when using the assumptions of fixed and predictable demand, as well as instant supplies when applying for replacement inventory (Slack et al., 1997). According to Baumol (1952) cash inventory can be seen as an inventory of a way of trade. In the EOQ model adapted to optimize cash the optimal configuration is achieved according to the relationship between the cost opportunity and the transfer cost. In the transfer model costs increase when the company needs to sell bonds to have more cash, as the opportunity costs increase with the existence of the cash balance, it is an application that has no profitability (Ross, Westerfield & Jaffe, 2002). The model makes the analysis of the cost associated with maintaining cash, i.e., the opportunity cost determined by the interest rate that the company no longer receives by not applying the resources, and the cost of obtaining the money for the conversion of investments into cash (Ross, Westerfield & Jaffe, 2002). The transfer cost represents expenditure incurred in application or redemption of funds, such as fees and taxes. Later, Miller and Orr (1966) present a model that meets the randomness of cash flows, while still considering the existence of only two assets, cash and investment, and the latter is an option of low risk and high liquidity (Figure 1). Cash ($)

H Z

Time

Figure 1 â&#x20AC;&#x201C; Variation of cash flows, adapted (Miller & Orr, 1966).

This model seeks to define two bounds for the level of cash resources: the minimum and maximum, so when you reach the upper bound (moment T1), represented by the high limit (H), investing an amount of the money in that provides the cash balance back to the optimal level of cash (Z). And to reach the minimum limit (moment T2) in lower bound (L) should be made a rescue of cash to obtain the optimal level again (Ross, Westerfield & Jaffe, 2002). Thus, by working the net cash flows (inputs minus outputs) the Miller-Orr model enables the cash optimization, based on the transfer costs (represented by F) and opportunity (represented by K), obtaining the following formulation (Ross, Westerfield & Jaffe, 2002):

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Z *  3 3F 2 / 4K  L The “*”denotes optimal values and σ2 is the variance of net cash flows. Even with the gain in relation to the Baumol model, considering randomization of cash flows, the Miller-Orr model assumes the definition of the lower bound (L), i.e. the risk of lack of cash, associated with a minimum margin safety depends on a management decision and is not treated in the model. At this point the problem addressed in this work lies, since the Miller-Orr model itself does not define the lower bound, it is the use of optimization algorithm in this problem setting the lower limit of optimal (L*), testing all possible L, with two decimal, to be able to minimize the cost. Later, most of the work done uses the same assumptions as in the original models, particularly the Miller-Orr, differentiating by a stochastic modeling of the problem, as the research developed by Tapiero and Zuckerman (1980), Milbourne (1983), Hinderer and Waldman (2001), Baccarin (2002), Premachandra (2004), Volosov et al (2005), Liu and Xin (2008) and Baccarin (2009). Few works use a computational method for solving the problem, as proposed by Yao, Chen and Lu (2006) that addresses the fuzzy systems as well as Gormley and Meade (2007) on the use of genetic algorithms, not being observed in the literature the application of PSO in this kind of problem.

2.2 Genetic Algorithms and Particle Swarm Optimization The evolutionary computation has its origins in the study of the theory of natural evolution, models and algorithms that seek to achieve the objective functions defined for it, starting from random resolution possibilities and, according to its development algorithm, and evolving in order to obtain better results in search to the established objective (Rezende, 2005). The algorithms of finding appropriate solutions, or optimization algorithms, use a series of assumptions or hypotheses about how to evaluate the fitness of a solution, so most of these models, based on gradient descent, depend on the occurrence of low oscillation problems or they will fail and obtain a local and non-global optimization (Moraes & Nagano, 2011). But evolutionary algorithms do not rely on this kind of premise. Fundamentally, performance measurement should be able to order only two comparative solutions and determine the one that somehow is better than the other (Foley, 2000). Genetic algorithms (Figure 2) population is a set of possible solutions to the given problem, each individual of this population with a similar structure to chromosomes.

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566 Moraes, M. B. Da C., Nagano, M. S.

GA Algorithm 1: T = O; 2: Generate initial population P(0); 3: for all each individual i o factual population P(t) do 4: Evaluate fitness of individual i; 5: end for 6: while stopping criterion is not satisfied do 7: t = t + 1; 8: Select population P(t) from P(t-1); 9: Apply cross operator on P(t); 10: Apply mutation operator on P(t); 11: Evaluate P(t); 12: end while Figure 2 â&#x20AC;&#x201C; General diagram of the life cycle of genetic algorithm (Rezende, 2005).

The chance of survival of each individual is evaluated by a cost function; the function to be optimized, the result of this function is the fitness of each individual as the best result to the problem, working in a selection to reproduce. Finally, evolution is provided by the application of genetic operators such as selection, crossover and mutation (MartĂnez et al., 2009). The selection operators seek to determine the fitness of each individual, with the aim of obtaining the best solution to the problem; after that, individuals are crossed, i.e. by joining portions of each of fit individuals, a new population of individuals is made and eventually some individuals suffer random changes mutation, according to a given probability of occurrence (Moraes & Nagano, 2011). The model of particle swarm optimization is more recent, and differs from genetic algorithms due to the fact that each possible solution (particle) has a random speed, drifting through hyperspace, thus each particle of the swarm is evaluated by a fitness function, with the best particle solution being stored, called pbest, also stored the best overall solution, gbest (Eberhart & Kennedy, 1995). These features enable the PSO convergence model to the optimal result in smaller computational times. Thus, from the current position of the particle (xi) that corresponds to the current solution, its current speed (vi), its best past position (pbesti) and the best global position of all particles in the swarm (gbest), each particle is updated interactively (Figure 3) in accordance with the previous attributes (Tsai et al., 2010).

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PSO Algorithm (Particle Swarm Optimization) 1: Procedure – objective function (f) 2: Initialize the swarm of m particles 3: while stopping criterion is not satisfied do 4: Evaluate each particle 5: for particle i, i = 1, 2, . . . , m do (update the best positions) 6: if f(xi) < f (pbesti) so 7: pbesti = xi 8: if f(pbesti) < f (gbest) so 9: gbest = pbesti 10: end if 11: end if 12: end for 13: for particle i, i = 1, 2, . . . , m do (generate the next generation) 14: vi(t + 1) = ω vi(t) + c1r1(pbesti − xi) + c2r2(gbest − xi) 15: xi (t + 1) = xi (t) + vi (t + 1) 16: end for 17: end while 18: end procedure Figure 3 – Particle swarm optimization algorithm (Adapted Chen & Jiang, 2010).

There are implications for the outcome of the models according to parameters and techniques of these operators in the case of GA function selection, ordering the fittest individuals, ensuring that the best alternatives found to the problem is always maintained, since the PSO function inertia, which keeps the solution in its original path, as well as the social and cognitive behavior, seeking forward towards the solution of best results already obtained, allowing its evolution and convergence in search of the optimal result. 3 Methodology The methodology of this work is focused on computational experiment of developing GA and PSO algorithms that are able to get the definition of the three parameters of a cash balance policy: the optimal level of cash (Z), the upper bound (H) and lower bound (L). Therefore, it is necessary to develop experiments in different scenarios for obtaining series of net cash flows to enable the validation of the developed models. In the specific case of the problem addressed, the referenced benchmarks in Baumol (1952), Tobin (1956), Miller & Orr (1966), Srinivasan & Kim (1986), Hinderer & Waldmann (2001), Gormley & Meade (2007) and Martínez et al. (2009) highlight the cash balance as a random variable with normal distribution. For the experiment we used parameters of mean and standard deviation of the samples at three different levels (low, intermediate and high). The definition of the intervals follows the assumption that the two parameters that compose the normal distribution (mean and standard deviation) should vary in ranges, enabling an

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568 Moraes, M. B. Da C., Nagano, M. S.

assessment of the sensitivity of the models to potential real effects in organizations, in order to compare them together. The definition of these parameters, shown in Table 2, was performed empirically by previous tests, since no information supporting its definition in the literature has been found. Thus, a total of 9 classes of problems, and for each class of problem 100 samples were randomly generated, called "Problems" with 500 value points each (Table 2). Subsequently, all the problems (900 samples for each of the 500 values) were tested for normal distribution using the Chi-Square Test (X2) and Kolmogorov-Smirnoff Test (KS), with a significance level of 95%, while those not complying with the precept of normality were replaced before the trial. Random Number Generation

Mean

Standard Deviation

Class 1

1,000

500

Class 2

1,000

5,000

Class 3

1,000

50,000

Class 4

20,000

500

Class 5

20,000

5,000

Class 6

20,000

50,000

Class 7

100,000 500

Class 8

100,000 5,000

Class 9

100,000 50,000

Table 2 – Random number generation

The aim was to validate the algorithms according to flows with different means and variances, obtaining flows more or less risky of presenting negative values in net cash. An optimization algorithm was applied initially using the Miller-Orr model by changing the lower bound of cash (L) in order to obtain the lowest cost. The variable L was defined empirically between $ 0.00 and $ 50,000.00. Considering the variation of L in $0.01, with two decimal, for a total of 5,000,000 possible values, we obtain the value of L that gives the lowest cost by the Miller-Orr model. So GA and PSO models have been applied to the problems, being programmed to minimize the cost of the cash based on the definition of the parameters Z, H and L simultaneously. The development of algorithms considers the following issues:  Initial cash balance: all series of cash balances left from a starting balance of $ 10,000.00, plus every time the value arising from the series of cash flows. The determination of a fixed initial balance does not affect the relevance of flows, it is set just after the first calculation of the cash flow;  The transfer cost (F) was set at $ 100.00 per transaction, be it investment (cash outflow for investment) when the balance reaches the upper bound, or disinvestment (output of investment to cash) when the balance reaches the JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 561-576

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minimum limit defined. The cost of transfer corresponds to the financial cost that the company incurs when making investment and divestment operations. As the Miller-Orr model only deals with the transfer cost as being a fixed amount of currency, in this case $ 100, the other models follow the same pattern. However, in practice, it is common to the composition of the cost of transfer to be formed by a fixed amount and a percentage value on the transaction value of investment / disinvestment. The $100 value was assigned empirically based on previous tests, similar to that used by Miller and Orr in their model;  The opportunity cost (K), given by the financial cost of obtaining cash when cash rupture occurs, having borrowed from the organization the obtained feature of 0.0261158% per day on this value, a rate which is equivalent to 10% per year. The opportunity cost is the interest rate that the organization would have to pay for borrowing money to make the necessary payments. The value of 10% per year was defined empirically similarly to that applied to long-term bonds and validated in previous tests;  The values of the ideal cash balance (Z), upper bound (H) and lower bound (L) to be defined by the algorithms GA and PSO, should be in a sample space between $ 0 and $ 300,000, set empirically, based on the results obtained by the trial of the optimization algorithm in the Miller-Orr model;  100 individuals of response value were generated (Z, H and L) in each experiment, with 500 iterations for each (GA and PSO) to obtain the cost for each time and total cost of cash flows;  After 10 interactions (1,000 solutions for Z, H and L) without the cost reduction algorithm was terminated, also considering the time as an efficiency factor. For the GA the following parameters have been set:  Values: binary, transformed from the series of cash balance, using 48 bits (equivalent to 6 digits);  Crossing: Roulette method between two parents generating two children, with 70% chance of occurrence;  Mutation: mutation rate of 1%, changing a random bit. For the PSO the following parameters have been set:  Values: nominal cash flows generated;  Inertia Rate: 10%;  Learning Rate: local optimum (cognitive behavior) and global optimum (social behavior) by 20% each. To enable a better result in setting parameter L, as well as GA and PSO which use random components in each question, the experiment was performed 10 times and maintained for comparative purposes with the best result. Thus, experiments were performed with 9,000 trials with GA and 9000 trials with PSO.

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570 Moraes, M. B. Da C., Nagano, M. S.

The parameters used in this methodology were assigned empirically, aiming at the observation of the composition of the result of the values of Z, H and L, because there were no references to base the form of structure of this problem. For comparative purposes an optimization algorithm was developed, which only changes the value of parameter L from $0.00 to $ 50,000.00 in value to two decimal, calculating for each L the total cost in each of the 900 problems according to the MillerOrr model. This algorithm is not feasible in more complex models (with more than one variable, as in this case L), because the computational time of a combinatorial problem would make it prohibitively expensive to solve real problems. The algorithms were developed in MATLAB® 2009 and used on a computer with Core2Quad Q8300 with 2,5GHz and 4GB of RAM memory, using Windows 7™ 64 Bits. The following results are presented and analyzed. 4 RESULTS The results obtained with the function of minimizing the total cost of ownership of cash, based on the lower bound (L) from the Miller-Orr model are presented in Optimal Algorithm. The results using the GA and PSO algorithms, with the average values calculated over the 100 problems used in the experiments in each class problem, show the cost of cash, the iteration in which the lowest cost was obtained and the computational time per seconds by achievement. Thus, comparative mean results of each class of problem are presented in Table 3.

Class of Problem

Optimal Algorithm Miller-Orr

GA Algorithm Iteration

PSO Algorithm

Cost

Time

Cost

Time

4,638.63

196.04

3,932.32

18.88

2.88

5,346.83

196.25

5,294.23

4.20

20,740.28

196.51

19,170.62

18,895.27

189.63

19,694.68

Cost

Iteration

Time

3,839.03

131.44

23.54

3.03

4,568.75

123.24

23.46

48.55

2.93

18,315.77

150.22

23.34

15,079.21

13.07

2.89

14,997.96

70.78

23.24

196.09

14,992.53

8.33

2.88

14,880.98

118.48

23.52

24,517.72

200.66

20,166.89

13.80

2.97

19,444.35

164.92

23.60

36,110.19

178.35

29,800.56

3.10

2.84

29,817.45

17.06

23.28

37,227.33

182.92

29,813.75

13.41

2.92

29,812.04

41.68

23.36

40,346.49

194.90

28,990.28

13.61

3.02

28,829.36

92.06

23.91

Table 3– Comparative results between groups by Optimal Algorithm, GA and PSO

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The results demonstrate that it is possible to both evolutionary computational algorithms (GA and PSO) to determine the policy of cash management with the parameters Z, H and L with lower costs than the Miller-Orr model optimized for variable L. It is noted that the GA algorithm is almost 10 times faster than the PSO algorithm, however, both are significantly faster than the optimal algorithm applied to the Miller-Orr model, since this is a trial and error algorithm. Comparing the cost of the cash, obtained by GA and PSO algorithms, in relation to the Miller-Orr model, we can verify an average reduction of 21.30% of the cost for the algorithm GA and 24.68% in the PSO algorithm, according to Table 4. So, the table shows the reduction of the total cost of the cash provided by computer algorithms, in monetary terms (Cost Reduction) and percentage (% Var), when compared with the cost obtained by the Miller-Orr Model. Class of

GA Algorithm

Problem

Cost Reduction

PSO Algorithm

% Var

Cost Reduction

% Var

706.30

18.60%

799.60

21.28%

52.60

1.28%

778.07

17.08%

1,569.66

8.24%

2,424.52

13.28%

3,816.06

25.33%

3,897.31

26.00%

4,702.15

31.38%

4,813.70

32.36%

4,350.83

21.65%

5,073.37

26.15%

6,309.63

21.17%

6,292.74

21.11%

7,413.58

24.87%

7,415.29

24.87%

11,356.21

39.18%

11,517.13

39.96%

General

21.30%

24.68%

Table 4â&#x20AC;&#x201C; Comparative results of cost reduction in GA and PSO in relation to Miller-Orr model

Note that the PSO algorithm obtained a greater reduction in costs in relation to algorithm GA, mainly in classes of problems 1, 2 and 3 corresponding to the lowest mean cash flow (mean = 1,000 in these classes), indicating a higher possibility of negative cash flows. In the case of companies with cash flows that have lower means and larger fluctuations (standard deviation), as in the case of classes 2 and 3, the algorithm GA did not make significant gains in relation to the optimized Miller-Orr model. Thus, the average relative deviation (ARD) between each algorithm (Optimal Miller-Orr, GA and PSO) and the best solution for cash balance policy (the one with the lowest cost), provides an insight into the most efficient algorithm. Furthermore, it is considered the number of times that each algorithm has a better solution, indicating that it is more effective to 900 problems, according to Table 5.

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572 Moraes, M. B. Da C., Nagano, M. S.

Class of

ARD

ADR

Best Solution

Problem

Optimal Algorithm Miller-Orr

GA Algorithm

PSO Algorithm

PSO

24.74%

5.54%

3.04%

42.00%

58.00%

17.09%

15.94%

0.00%

100.00%

13.28%

4.68%

0.00%

100.00%

26.47%

0.93%

0.38%

43.00%

57.00%

32.68%

0.99%

0.24%

31.00%

69.00%

26.15%

3.73%

0.00%

100.00%

21.37%

0.16%

0.22%

55.00%

45.00%

25.11%

0.20%

0.19%

54.00%

46.00%

40.09%

0.66%

0.09%

25.00%

75.00%

General

25.22%

3.65%

0.46%

27.78%

72.22%

Table 5â&#x20AC;&#x201C; Comparative results of ARD and Best Solution

In Table 5 it can be seen that the PSO algorithm has the lowest average mean deviation overall, losing only in Class 7. Furthermore, the PSO algorithm gets the best solution in 72.22% of the time, and in classes 2, 3 and 6 it had the best result problems in 100% of the time compared with the algorithm GA. Later we used the t Test for two samples assuming equal variances in order to verify that the cash costs obtained by the algorithms are significantly different at 5% level, indicating that the costs obtained with GA and PSO algorithms have the same characteristics distribution over 99% (Table 6). t-Test: two sample assuming equal variances Mean Variance

GA 18,582.27

23,060.51

86,859,400.32

151,313,595.00

900

Observations Stat t

PSO

-8.705272018

P(T<=t) bi-caudal

7.03163e-18

t critical bi-caudal

1.961284203

Table 6â&#x20AC;&#x201C; Comparative results of cost reduction in GA and PSO over the Miller-Orr model

Thus, despite the best results of the PSO algorithm, the costs obtained are significantly different from the algorithm AG, at a level of 7.03163e-18. In a comparison between the PSO algorithm and the Optimal Algorithm in the Miller-Orr model, the descriptive level obtained is 0.995853067, demonstrating that the costs are not significantly different. Thus, it is possible to observe that the Miller-Orr model can be used with a trial and error algorithm to obtain the minimum cost, but even in this situation results have higher costs than evolutionary algorithms GA and PSO.

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Between the algorithms, the computational time factor was dropped from the analysis because a difference of 20 seconds more between the models would not be a limiting factor. So, between the GA and PSO models should be noted as the average relative deviation (ARD), as a measure of efficiency and percentage of gain and as a measure of effectiveness. In the two measures, PSO algorithms performed better although this cost difference is not statistically significant at 5%. 5 CONCLUSION

The genetic algorithms and particle swarm optimization have been proven to be useful tools in the application this kind of optimization problem. When assisting in the definition of parameters for managing, cash balance can find with higher impartiality the optimal values for the cash management. The analysis shows that the PSO algorithm gets lower costs with higher efficiency (ARD) and efficacy (greater number of hits), but not significantly different from each other. Regarding the computational time, the algorithm GA showed an average time of 2.93 seconds per problem, while the PSO algorithm had an average time of 23.47 seconds. Considering that each company would be a problem, although the computational time average PSO algorithm is much higher, a difference of 20 seconds to get the firm's cash balance policy would not be something problematic. In practice, the two kinds of algorithms are presented as a practical solution to define a policy for the management of the cash balance, obtaining significant gains in relation to cost and time obtained by the optimized Miller-Orr model. However, given the experimental results, the PSO algorithm has higher convergence in the pursuit of lower cost, within the criteria established. This study focuses on the comparison between the Miller and Orr model and computational algorithms GA and PSO developed with the aim of setting management policy in cash, with the variables for the ideal cash (Z), upper bound (H) and lower bound (L), but the models GA and PSO can be applied for the definition of all more complex cash policies, without the limitations of the Miller-Orr model, as: ď&#x201A;ˇ Consider only a fixed cost in monetary cost transfer (F), when in practice these costs usually have a fixed component and a variable component as a percentage of the operation amount; ď&#x201A;ˇ Consider the same transfer cost (F) in investment operations and rescue, since in practice there are different costs; ď&#x201A;ˇ The incidence of opportunity cost (K) when cash resources are left without considering obtaining profitability with the use of financial resources, which would reduce the cost of cash maintenance. So, the results point to a promising area, but further studies and experiments are needed, since the results could not be compared with other newer models, like the ones y Hinderer & Waldmann (2001), Gormley & Meade (2007) and Baccarin (2002 e

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574 Moraes, M. B. Da C., Nagano, M. S.

2009), because these models have shown reductions in limitations in the Miller-Orr Model. Nevertheless, with these diversifications, it would not be possible to apply a control algorithm as we did in this study, since computation time of the definition of three parameters simultaneously would be prohibitive, hence the great relevance of this study; we present results which demonstrate that GA and PSO algorithms can be used in more sophisticated models to the problem of cash management, signs of obtaining practical solutions acceptable. Therefore, this study presents its contribution to the validation of GA and PSO algorithms, especially with the PSO model as reliable, quick and malleable in the development of algorithms that enable the reduction of limitations, enabling the development of policies for cash management closer to reality, which are applicable for the financial management of organizations. REFERENCES

Baccarin, S. (2002). Optimal impulse control for cash management with quadratic holding-penalty costs. Decision in Economics and Finance, 25, 19-32. Baccarin, S. (2009). Optimal impulse control for a multidimensional cash management system with generalized cost functions. European Journal of Operational Research, 196, 198-206. Baumol, W. (1952). The transaction demand for cash-an inventory theoretic approach. The Quarterly Journal of Economics, 66, 545-556. Brealey, R. A. & Myers, S. C. (2005). Princípios de Finanças Empresariais. Lisboa: McGraw-Hill, 5a. Ed., 1240 p.. Chen, Y.-P. & Jiang, P. (2010). Analysis of particle interaction in particle swarm optimization. Theoretical Computer Science, 411, 2101-2115. Eberhart, R. C. & Kennedy, J. (1995). A new optimizer using particle swarm theory. Sixth international symposium on micro machine and human science, Nagoya, Japão. Fogel, D. B. (2000). What is evolutionary computation? IEEE Spectrum, 26-32. Gormley, F. M. & Meade, N. (2007). The utility of cash flow forecasts in the management of corporate cash balances. European Journal of Operational Research, 182, 923-935. Hinderer, K. & Waldmann, K.-H. (2001). Cash management in randomly varying environment. European Journal of Operational Research, 130, 468-485. Liu, B & Xin, C. (2008). An Online Model for Managing Cash: An Alternative Approach to the Miller-Orr Model. Fourth International Conference on Natural Computation – IEEE Computer Society. Martínez, M., García-Nieto, S., Sanchis, J. & Blasco, X. (2009). Genetic algorithms optimization for normalized normal constraint method under Pareto construction. Advances in Engineering Software, 40, 260-267. Milbourne, R. (1983). Optimal Money Holding under Uncertainty. International Economic Review, 24, 685-698. JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 561-576

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Miller, M. & Orr, D. (1966). A model of the demand for money by firms. The Quarterly Journal of Economics, 81, 413-435. Moraes, M. B. C. & Nagano, M. S. (2011). Otimização do saldo de caixa com algoritmos genéticos: um estudo relacionando cruzamento e mutação no modelo de Miller e Orr. Revista Produção Online, 11, 399-417. Opler, T.; Pinkowitz, L.; Stulz, R.; Williamson, R (1999). The determinants and implications of corporate cash holdings. Journal of Financial Economics, v. 52, p. 3-46. Premachandra, I. M. (2004). A diffusion approximation model for managing cash in firms: An alternative approach to the Miller-Orr model. European Journal of Operational Research, 157, 218-226. Rezende, S. O. (2005). Sistemas Inteligentes – Fundamentos e Aplicações. São Paulo: Ed. Manole, 525 p. Ross, S. A., Westerfield, R. W. & Jaffe, J. F. (2002). Administração Financeira – Corporate Finance. São Paulo: Ed. Atlas, 776 p. Slack, N.; Chambers, S., Harland, C.; Harrison, A. & Johnston, R. (1997). Administração da Produção. São Paulo: Ed. Atlas, 726 p. Srinivasan, V. & Kim, Y. H. (1986). Deterministic Cash Flow Management: State of Art and Research Directions. OMEGA – International Journal of Management Sciences, 14, 145-166. Tapiero, C. S. & Zuckerman, D. (1980). A Note on the Optimal Control of a Cash Balance Problem. Journal of Banking and Finance, 4, 345-352. Tobin, J. (1956). The interest elasticity of the transaction demand for cash. The Review of Economic Statistics, 38, 241-247. Tsai, S.-J., Sun, T.-Y., Liu, C.-C., Hsieh, S.-T., Wu, W.-C. & Chiu, S-Y. (2010). An improved multi-objective particle swarm optimizer for multi-objective problems. Expert Systems with Applications, 37, 5872-5886. Volosov, K., Mitra, G., Spagnolo, F. & Carisma, C. L. (2005). Treasury Management Model with Foreign Exchange Exposure. Computational Optimization and Applications, 39, 179-207. Yao, J.-S., Chen, M.-S., Lu, H.-F. (2006). A fuzzy stochastic single-period model for cash management. European Journal of Operational Research, 170, 72-90.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.577-596 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300007

INFORMATION TECHNOLOGY MANAGEMENT SYSTEM: AN ANALYSIS ON COMPUTATIONAL MODEL FAILURES FOR FLEET MANAGEMENT Jayr Figueiredo de Oliveira Getúlio Vargas Foundation, São Paulo, São Paulo, Brazil Marcelo Eloy Fernandes Nove de Julho University, São Paulo, São Paulo, Brazil Carlos Roberto Camello Lima Methodist University of Piracicaba, Santa Bárbara d’Oeste, São Paulo, Brazil __________________________________________________________________________

ABSTRACT This article proposes an information technology model to evaluate fleet management failure. Qualitative research done by a case study within an Interstate Transport company in a São Paulo State proposed to establish a relationship between computer tools and valid trustworthy information needs, and within an acceptable timeframe, for decision making, reliability, availability and system management. Additionally, the study aimed to provide relevant and precise information, in order to minimize and mitigate failure actions that may occur, compromising all operational organization base functioning. Keywords: Computer System, Control System, Information Management, Information Technology, Maintenance Management.

RESUMO Este artigo propõe um modelo de tecnologia de informação para avaliação de falhas na gestão de frotas. A pesquisa qualitativa realizada por um estudo de _____________________________________________________________________________________ Manuscript first received/Recebido em 22/11/2011 Manuscript accepted/Aprovado em: 19/07/2013 Address for correspondence / Endereço para correspondência

Jayr Figueiredo de Oliveira, Pesquisador da EAESP-FGV. Pós-Doutorado em Administração – Administração de Tecnologias da Informação (EAESP-FGV); Doutorado em Educação (PUC-SP); Mestrado em Administração e Planejamento (PUC-SP) e Bacharelado em Administração de Empresas (UNILUS), MBAs em Gestão de Tecnologias da Informação (UNI-FMU) e em Inovação, Tecnologia e Conhecimento (FEA-USP). E-mail: jfigueiredo@usp.br Marcelo Eloy Fernandes, Professor e coordenador do Curso de Superior de Tecnologia em Gestão da Qualidade da Universidade Nove de Julho. Doutorado em Engenharia de Produção (UNIMEP), Mestre em Administração de Empresas (FECAP), Bacharelado em Análise de Sistemas (UNIP). E-mail: marceloeloyfernandes@uninove.br Carlos Roberto Camello Lima, Doutorado e Mestrado em Engenharia Mecânica (UNICAMP). Professor Titular da UNIMEP, Pós-doutorado em Engenharia e Ciência dos Materiais (SUNY - State University of New York) e Ciência dos Materiais e Engenharia Metalúrgica (UB – Univ. de Barcelona). Graduado em Mecânica (UNESP) e Ciências Econômicas (UFS - Universidade Federal de Sergipe). E-mail: crclima@unimep.br Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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caso numa empresa de Transporte Rodoviário Interestadual no Estado de São Paulo, propôs estabelecer relações entre as ferramentas computacionais e a necessidade de informações, fidedignas e em intervalos de tempo aceitáveis como válidas, para as tomadas de decisão, confiabilidade, disponibilidade e gestão de sistemas. Adicionalmente, o estudo visou fornecer informações relevantes e precisas, de forma a minimizar e mitigar ações de falhas que possam ocorrer, comprometendo o funcionamento de toda a base operacional da organização. Palavras-chave: Sistema Computacional, Sistema de Controle, Gerenciamento de Informação, Tecnologias da Informação, Sistemas de Informação. 1.

INTRODUCTION

The hereby article presents a computational model for evaluating failures within the Interstate Road Transport System management, typified as a critical operational process. This computational model is being idealized according to the latest transformations going on in the organizational scenario, where companies need to keep their competitive edge. Customers are their main target, thereforeimplementing strategic actions becomes an essential step towards contributing to an optimized Maintenance Management with a highly reliable processes expectation, preventing impacts and further charges with products and/or provided services. Souza and Lima (2003) agree with this guideline which, among other proceedings, was adopted by world-class companies as a manner to ensure their survival and competitiveness along with the consequent market growth – the RCM (Reliability Centered Maintenance methodology) process remains. On JQME’s (2010) concept, the continuous search of companies for cost reductions has required the adoption of severe measures regarding their industrial maintenance plans, mainly by retrenchment of excessive inventory replacement parts and upgrading productivity levels along with company’s quality. In this context, maintainability needs to be examined as an important function amid strategic politics towards extracting results from organizations, thus enabling companies to reach competitive market levels alluding to quality and productivity. Objective The general goal of this article is to propose a computational model, working as a support and assistance for previewing and anticipating the decision-making moment in transactional processes, with a focal point on a service provider organization of the Interstate Road System for Public Transport. Arguments This survey was based on the bellow enumerated aspects: 1) Reduced number of research dealing with the herewith proposed problem;

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2) Priority resulting from aspects that could bring about damages to human life and consequently, financial and economic loss to organizations; 3) And finally, on the hampering of integration regarding scattered information amid multiple computational systems, resulting on delays and problematic decision-making. Thus, this surveyâ&#x20AC;&#x2122;s distinctive proposal, while facing analysis that deals with Reliability Centered Maintenance, relies on the fact that they generally have no consideration towards developing an integrated computational model, whose proposal would be to investigate methods with a focal point on Maintenance Management, strictly speaking, maintenance throughout an operational cycle with broader efficiency and competence. Service providers for the Road Transport System in general and also for those covering longer distances, like the Interstate Road Transport System, demonstrate operations that need, as for performance dominant factors, high availability and reliability. The final consumer for this type of business is inclined to give negative evaluations to variables derived from mechanic failures, lack of maintenance or the unavailability of an appropriate maintenance program. For the above reasons and because of the gaps left in previous surveys made in this field, the herewith research is developed in order to classify the actual occurring variables, the scenario within and which the recommendations to minimize occurrences linked to procedure failures are. Therefore, the first argument towards this research shows that after an extensive revision of the literature on Reliability Centered Maintenance and employment of Business Intelligence Technology, it was observed that until then, some issues had not been duly emphasized while indicating specific utilization of resources for Information Systems and computational models, supporting decision-making for projects of maintenance systems targeted towards the Road Transport System segment. Some surveys and surveyors stand out when the matter deals with understanding the relation between maintenance and the adoption of Information Technology. In order to exemplify this, we have Camposâ&#x20AC;&#x2122; (1999) proposal, which deals with the employment and support of Information Technology, aiming for problem solutions to fleet vehicle maintenance management based on a knowledge management system. Furthermore, there is research supporting the first argument, such as research by Almeida Junior (2003), Oliveira (2010) and Santos (2001), who respectively depict comparisons between maintenance variables in information security systems, the correlation between resource dynamics and information system tools for subway transportation systems. Also through considerations on maintenance processes for bus operating companies, it was perceived that this survey highlights differing perspectives from those originally aimed for this research. On the other hand, the second argument for this study is produced through the awareness that human life is the most important heritage at all times; therefore, assuring integrity, security and reliability for maintenance systems that concern human life ends up being a fundamental consequence. Lastly, the third argument is based on the privation of integration between maintenance systems and decision-making support systems. Whereas, when information

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is found scattered throughout diverse computational systems, it becomes an obstacle for distinguishing the level of importance that an injury/accident indicator supervisor has. Facing the context of the above exposed matter, the argument of this study relies on the interdisciplinary contribution of showing a proposal to disseminate theoretical fundamentals and good managerial practices while using system tools that support decision-making in organizations, as a basis for their day-to-day business and operations. Thus, what remains is a search to legitimize an efficient adoption of information systems supporting decision-making and expressively helping to upgrade actions, on the matter of maintenance systems for the Road Transport System segment. 2.

RESEARCH PROBLEM

According to Nunes and Valladares (2002, p.19), “RCM is configured as a strategic and organizational tool of the maintenance field that adds value to the productive process”. This means that the triple combination generated by a technical equipment performance, allied to professional knowledge of those in charge, handling with decision-making tools aligned to organizations’ strategy, brings forth confidence and reliability to the operation, improves operational cost management, allowing to reduce failures and occurrences with maintenance. Facing this line of thought, this research addresses this issue with the following question: “What would be the feasibility of implementing a computational model that generates performance and unforeseen indicators for Road Transport System, characterized as an essential process for your operation?” 3.

BIBLIOGRAPHIC REVIEW

Centering the hereby paper, we will hither initiate a brief review of the applied concepts of maintenance, whose activities have been increasingly prized within organizations. The review focuses on the importance of the maintenance function to prevent or to avoid failures and damages, consequently resulting in quality improvement, while reaching productivity gains for companies. Maintenance Overview Maintenance activities have the purpose of keeping equipment in suitable conditions for operating. These activities may be classified as: planned and not planned corrective maintenance; preventive maintenance; predictive maintenance; detective maintenance and maintenance engineering (Pinto and Xavier, 2001). Thus, understanding that Planned Corrective Maintenance is a correction carried out from a predictive monitoring through managerial decision making, that is to say, performance on the basis of predictive monitoring or the choice to operate until damaged. Moreover, unplanned corrective maintenance happens when it is noticed that the equipment is not producing as expected, owing to its characteristics relying mainly on the maintenance performance of an event that has already occurred, generally resulting in high costs for the company (Pinto and Xavier, 2001).

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According to Siqueira (2009), preventive maintenance enables support in conformance with a pre-established schedule presented by the company, aiming to lessen errors and costs, including performance decline. Its execution is focused on minimizing probabilities for equipment failures. Predictive maintenance aims for the performance of maintenance, only when equipment needs so (Slack, Chambers and Johnston, et al., 2007). Hence, predictive or supervised maintenance identifies incipient failures before they may even become critic; thus, permitting a most precise planning. Detection maintenance, in general, searches for hidden irregularities that were undetected by equipment or the system operator, usually related to command or to a protection system (Pinto and Xavier, 2001). Maintenance Engineering incorporates criteria that increase guaranteed availability and reliability amid maintenance activities, where planning and control are developed with the intention of predicting or previewing failures and further optimizing performance of the maintenance production teams. Concluding, they are assignments that develop, implement and analyze results through computerized maintenance management systems (Pinto and Xavier, 2001). Reliability Based on constant incidents, around the year of 1950, with failures and diminishment of availability for the electronic systems of the military field, reliability emerges as a topic of interest in the United States of America. This situation has inclusively driven the United States Department of Defense and the electronic industries to create a survey group to research on the subject of reliability (Villemeur, 1992). Reliability is understood as something that causes a system to work accordingly to what they were designed for, under particular conditions and during a specific period of time (Son, et. all, 2009). Also, the purpose of Reliability Engineering is to identify failures in system modules that are considered critical, aiding further so that these failures do not happen at an operational level (Rausand and Hoyland, 2004). Conversely, we have the safety that corresponds to the probability of an operating system complying correctly with its duty. Amid extremely risky systems, both functional and informational security is present, being the latter a protection against failures affecting the entire system safeguarding data integrity. As far as this is concerned, the Road Transport System may use automatic controls to help activate system security mechanisms, keeping in mind the probability of human failure incidences; thus, preventing accidents. Security terms for high risk systems are commonly used, as follows: exposure; vulnerability; attack; threats; control (Sommerville, 2007). But when dealing with risk control management, the term ALARP - As Low As Reasonably Practicable (see Figure 1), though seldomly used, is of great utility and may be observed as a guideline for adopting control strategies for risk reduction.

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Figure 1 - ALARP Principle. Source: (IEC, 1997) It is understood, that the Interstate Road System is a freeway network classified by a high level of accidents and it needs to count on an essentially reliable service in order to transport human lives. Reliability Centered Maintenance Failure mode effects that may incidentally occur during a productive process, together with equipment, functions and inter-relations belonging to this field, deserve special attention from the maintenance area. According to Marçal and Susin (2005), “an effective maintenance process includes all the technical and organizational activities that may guarantee the expected reliability for operating machinery and equipment in general.” Maintenance and repairing works that follow particular basic guidelines reduce the chance of having unexpected failures and, as consequence, loss of production, time and unnecessary expenses. On the other side of the fence, equipment must receive a different treatment, based on their needs and specific importance, thus generating distinctive maintenance policies for different groups of equipment. According to Siqueira (2009), “one of the characteristics of the Reliability Centered Maintenance (RCM) is to provide a structured method to select maintenance activities for any productive process.” With RCM, working groups can dedicate themselves to upgrading levels of equipment reliability, while concentrating efforts on machinery considered as priority inside the factory structure. One of the RCM application potentials is by obtaining a maintenance plan with an efficient cost. This method recovers and systematizes knowledge from those involved in its process, thus generating a greater commitment over the performed work.

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Data Management and Information Technology This topic provides information of systems supporting managerial decisionmaking, along with company’s data which are integrated to operational systems, with the aim of improving its performance and reliability. Data Warehouse In order to obtain competitiveness and profitability, companies need to control their decision-making process through a faster pace; thus, they need to react with increasing agility while changing their environment, which usually happens through analysis, scheduling and performing tactical actions or suitable strategies. O’ Brien (2008) has reported that a Data Warehouse stores information from current and later years, drawn from various operational data banks of an organization. It is basically an already classified, edited, standardized and integrated central data source, that may be used by managers and other final pro users, for a wide range of arrangements and business analysis, market research, and decision-making support. This resource integrates and consolidates information for various collections; it also dimensions and consolidates data, organizing it with the aim of improving consultation performance. Namely, the Data Warehouse may be considered as a factory of enterprise information . Kimball (1998) specifies some goals for a Data Warehouse; the main ones are: a) Provide organizational or corporate data access; b) Keep reliable and consistent data, in accordance with the company’s criteria; c) Separate, combine and catalogue data so to facilitate and be available for any possible visions of business; d) Supply means for consulting, analyzing and presenting information; e) Guarantee reliable data publishing; to assure data quality in order to support business re-engineering. Data Mart Data Mart makes part of a Data Warehouse. Even though it has a small capacity, its employment attends a department of the company with the same characteristics of the Data Warehouse (Singh, 2001). Data Mart is denominated this way because it was created from a Data Warehouse with an enterprising scope, where a central data warehouse serves the whole organization or where it creates smaller decentralized warehouses which are the so called Data Marts. Data Mart usually focuses on a single area of interest or a specific business line, thus permitting it to be set up at a faster pace and at smaller costs, compared to setting up a Data Warehouse with an enterprising scope. Data Mining Data Mining storage capacity goes through an everyday challenge, because there is a major growth of data available. So that Data Mining along with all its tools enables a data “mining”, in order to generate a solid value of facts, transforming them into

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knowledge and information. As far as this is concerned, Data Mining may be looked at as a method that searches and detects logic or mathematical descriptions, which are often of complex nature, with sequences and orderliness in a set of data search detecting patterns, associations, adjustments, anomalies, statistic structures and data events. Data Mining has the following purposes (Elmasri and Navathe, 2002): a) forecasting – demonstrating how certain attributes will be behave in the future; b) identifying – the data pattern is used to identify the existence of an element, situation or activity; c) classifying – data is categorized into different classes and identified based on a combination of parameters; d) optimizing resources. BSC (Balanced Score Card) In order to measure a company’s performance, a financial report is usually employed based on assets that enable showing profits or losses; however, the intangible assets have nowadays also become a source of competitive advantage. So the Balanced Scorecard (BSC) emerges, a strategic tool that employs elements capable of supplying such demands. Kaplan and Norton (1997, p. 08), exemplify that: “Financial measures reveal the history of past events, an adequate account from companies of the industrial era, when long-term investment capacities and customer relationships were not fundamental for success.” According to Kaplan and Norton (1997, p. 08), “A Balanced Scorecard structure is formed through four perspectives: financial, clients, internal processes, and strategic training and growth.” BSC is focused on a search for financial objectives, and also on attributes embedded in the company’s mission, and they are a reflection of the vision and strategy of the organization for all the four dimensions of this appliance and thus, for each perspective, besides objectives, goals must be established, and procedures and performance indicators implemented. Hence, the system enables administrators with a financial performance followup of the company, auditing alongside the growth process for capacity construction. In other words, aligning the current performance and focusing on future performances of the company, thus encouraging managers to direct their attention to factors that conceive economic value. Operationally speaking, these indicators distributed amongst four managerial processes, which contribute to long-term strategic goals bound to short-term actions, precisely, it explains and interprets strategy and vision; communicates and associates objectives and strategic measures; plans and establishes goals aligning strategic enterprises; improves feedback and strategic apprenticeship. Computational Environment Proposal This item demonstrates the development of an itinerary for the computational model of maintenance focused on reliability, correlating them to Kimball’s (1998) nine

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steps. It performs the display of a pattern and describes the proposal for generating probability indicators for Road Transport System. Further still, it provides support and outlines the initial feats of the Brazilian Interstate Road Transport System. General Script Elaboration While elaborating a script for a computational model for maintenance management focused on reliability, Kimball’s (1998) nine steps may be useful; considerations are described o=un the stages below: 1st ) Choosing process – process is selected (or functions) on a Data Mart subject in particular; 2nd ) Choosing granularity – based on the former chosen stage, granularity of elements to be stocked is chosen and a fact table is developed; 3rd ) Identifying dimensions – constructing a list of dimensions so to determine the context of questions about facts at the fact table; 4th ) Choosing facts – granularity of the fact table determines facts that may be used at Data Mart. All facts should be expressed at the suggested level by granularity; 5th ) Stocking preliminary calculations in the fact table – once facts are selected, they should be reexamined in order to determine whether there is a chance of using preliminary calculation; 6th ) Dimension table rounding off – return to dimension tables and add the highest possible text descriptions to dimensions; 7th ) Choosing data bank duration – decisions on data records life cycle. The duration refers to the length of action of the fact tables; 8th ) Determining dimensional changes – stocking old dimension descriptions should be used as a record of former transactions; 9th ) Deciding on consultation priority – subjects that are considered as critical should be studied and treated while assembling Data Mart, pursuing utmost security on transactions. General Itinerary for Development and Performance Indicators It is within this topic that we will locate the description of a proposal on contingence indicators planning for Road Transport System. In its core, the proposal gathers a set of information that represents in a detailed manner, operational processes, implicated computational resources, a main source of information assortments, as well as an analysis of the main points of failure for the surveyed model. In order to be able to analyze questions on the technical and functional feasibility of this paper , we have managed to develop a diagram, shown in Figure 2, in such a manner as to represent the hierarchy of logic steps towards the stages of each assignment, as follows:

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Figure 2 – Computational Model for analyzing Maintenance Indicators Source: (Authors, 2010) 

Failures and information supply sources: starting from the sketching and auditing of procedures done in the company, aligned to people concerned with maintenance management and operations, it was possible to detect that the main failure sources were among operational systems for vehicle control (1), maintenance operational systems (2), and the external data system (3), that contain data on the electronic reading system installed inside the company’s vehicles. Incidences generated from the external data system did not gain a direct access, bearing in mind that this system does not make part of the company’s conventional net, since it is a highly available system. However, all the failures detected by the operational control system were registered at the external data providers and maintenance (5 and 6), as well as registered data into work order for a future historic evaluation.



Collection process, handling and data transference: all collection processes, handling and data transference from system data (4, 5 and 6) are done twice a day by the ETL tool (7) (Extracting, Transforming and Loading), thus ensuring, that the character of the imported information is consistent, upstanding, correct, complete, not redundant and adherent to decisionmaking through the company’s needs.



Data storing: after the ETL process (7), data is stored on the server (8). The collected data from maintenance transactional systems is stored in the form of selected dimensions, each one set in their own dimensional model inside the Data Warehouse (8).



OLAP (On Line Analytical Processing): along with data already available in the Data Warehouse (9), the organization’s managers (10) may begin strategic modeling for decision-making through graphic consultation and/or personalized reports, molded through the organization’s needs.

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 Feedback process: after an analytical search through the OLAP (On-line Analytical Processing) layer (9), expectations towards secure strategic decisionmaking, guarantee actions directed to system quality upgrading. It may be observed that the above described environment has made the information cycle generated by the company most likely to be understood, as well as facilitating visualization and accomplishment of possible testing on analytical and decision-making processes, made necessary in this paper. It is expected, in this particular case, a half day break for updating information on the analytical environment, thus meeting the expectations of participating managers for the company decisionmaking process. The concept of Reliability Strategic Indicators (Indicadores Estratégicos de Confiança (IEC)) is originated from the survey and definition of the following authors: Kaplan and Norton (2000), who utilized the BSC (Balanced Scorecard) method, as a main factor for the Key Performance Indicators (KPI) search. We must hereby highlight that the hereby handled Strategic Indicators were evaluated and adjusted in accordance with the reality of this case survey. As represented in Figure 3, the indicators of this survey have established technological parameters for factors related to acquisition, implantation, expansion and the pursuit of modernizing the current equipped systems of the company. Still on the maintenance point of view, strategies related to maintainability and reliability of equipment operating in corporations were duly defined.

Figure 3 – Strategic Indicators Applied to Maintenance. Source: (Authors, 2010) Proceeding, Strategic Indicators will be described, suggested and extracted from this case survey, as follows: 1º) Failure Aspect Indicator (1): this indicator is related to the intersection of occurrences with Aspects and equipment Failures;

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2º) Failure Type Indicator (2): this indicator is related to the type of failure occurring with equipment, measured by the mode (mechanic, electric, structural and human failure,) by type of failure (ductile, fragile, fatigue, thermic fatigue, mechanic fatigue, electric fatigue, corrosion, abrasive, pressure, torsion, magnetic, overcharge, over-tension, knowledge, attention and deterioration); 3º) Occurrence Indicators (3): this indicator deals with items like work order numbers, type of service, among other; 4º) Halt Indicators (4): this indicator deals with halt cases checking for errors (repair, test, alignment, calibration, lubrication, revision, caster, adjustment, replacement, cleaning, etc.); 5º) Failure Diagnosis Indicator (5): this indicator identifies failure diagnosis symptoms that are related to: overheating, electric crash, highvoltage, motor abnormal noise, viscosity, wheel abnormal noise, smoke, pigmentation, coloring, improper signaling, fairing abnormal noise, electric charge evasion, abnormal trepidation, loss of pressure, oil odor, etc.; 6º) Line/Region Indicator (6): this item highlights granularity of data related to line number, origin, destiny, region and distance between origin and destiny; 7º) Product x Resource Indicators (7): this indicator rescues groups of products: air-conditioning, cooling device, gearbox, chassis, differential, steering wheel, electric components, brake, metal repair, cleaning, motor, rolling and suspension; related to products; 8º) Time Indicator (8): this indicator is valid through time variable, according to established: year, semester, trimester, two months, month, fortnight, week, days, hours and minutes; other variables are - still hours, hours of service attendance, standby hours, preventive hours, availability, occurrence hour, etc.. 4.

METHODOLOGY

According to Godoy (2007), there are three possible methods to carry out a qualitative research: documental research, case study and ethnography. The hereby adopted qualitative method will use a case study from a company located in the whereabouts of São Paulo, whose operational process meets with the proposal of this project, in other words, it includes critical and complex operations for the Interstate Road Transport System mode. As reported by Miguel et.al. (2010), “amid the qualitative viewpoint, the subjective reality of individuals involved in the survey is considered relevant and contributes to the development of the survey.” The survey is made with a big sized organization, whose segment is the Interstate Road Transport System. The hereby sample is according to the required profile for this study, since it works inside an environment where total reliability is a must for management and application of their operational processes.

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Nowadays, the company has significant expenditures with maintenance due to its inherent critical condition, a justification towards which implementing a system that integrates their equipment to a RCM management with a more precise communication net would definitely enable a substantial expense decrease. Motivated by this case study and with the implementation of a computational model, it is estimated that this company will be able to save expenses with maintenance, which will possibly be progressively reduced and shown during the course of this survey. According to Miguel et.al. (2010) “among the main benefits of leading a case study is the possibility of developing new theories and increasing understanding towards genuine and contemporary events.” Originally, data collection happens by attaining information from the maintenance staff, by means of a previously obtained historical record. Equipment has failure records sourced from their last three years of operation. However, we will only take in consideration components with higher levels of failure propensity and consequent influence on the operational cycle halt, generating high maintenance costs and production loss for this company. This information will be stored into the RCM programs and integrated to Communication Nets, thus, enabling in advance the delivery of information to the Maintenance Engineering, reporting any situation involving excessive usage or an 80% useful life cycle, proceeding without ceasing the operational cycle. Equipment records should also be obtained from suppliers in a detailed manner, so to include every single part of the equipment and accessories considered as most urgently important in terms of maintenance when submitted under stressing conditions, as critical process cases may be. Under Gil’s (2002) opinion, “researches may be classified following the proposed objectives and/or with the employed techniques and procedures. Regarding objectives, researches may be exploratory, descriptive or explanatory.” Further in this paper, we further adopt “Theoretical Reference” for the Bibliographic Research, which is a work development whose research problem requires a mere theoretical approach. Although, with almost all research works it becomes necessary some type of labor of this nature, as bibliographic research in this undertaking is exclusively developed from bibliographic sources or papers. In turn, the researched company’s profile in this paper belongs to the Interstate Road Public Transport, which already has fifty years of activity in the Brazilian market. The company headquarters is located in the Northern region of São Paulo city, near the great Highway Service Centre of the city, which remains as a competitive determinant and distinctintive center, because of the easy availability of vehicles. The service is offered to most of the interior cities and Capital of São Paulo State, owning a fleet of approximately 1,235 buses. One of the characteristics of this bus fleet is providing comfort to the customer; by aiming at this; the fleet is equipped with modern video and music center equipment, air-conditioning and constant investments with the acquisition of new vehicles.

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Regarding considerations with security and bus maintenance, the company usually renews its fleet every two years and executes maintenance after 15,000 km of road running for new vehicles; for those vehicles which have already ran a bit more, maintenance is done after 8,000 km, according to indications of the Instruction Manual. Being the company’s maintenance area the most important and best equipped section, investments are very elevated, roughly R$15 million with components, replacement parts, automation and maintenance fleet management. The corporate philosophy is that all buses should be submitted to a general revision after ending the day’s route; further still, there is a training-bus project that runs throughout the country (Brazil) retraining mechanics and drivers. The company currently employes more than ninety employees to manage the organization’s maintenance; these employees include from mechanical engineers to mechanics trained at the bus supplier’s factory, both with lots of operational and business experience. Buses run up to 900 km of daily journeys, serving millions of people traveling from their homes to other states and municipalities that are very distant from the State of São Paulo. Although the company worries mostly about their service quality, many of the maintenance services are still done through manual work orders, which are transcribed to spreadsheets, generating error probabilities and delays for the decisionmaking processes. Another important aspect to be highlighted, for the in loco visit done biweekly at the organization since 2009, is the fact that fleet vehicles, manufactured between the years of 2008 and 2010, already have a Fault Detection technology installed within them (Fieldbus). Consequently, it has been possible to collect incidents and failure statistics data directly from the source, through reading the application software embedded in the Fieldbus Pattern and language based on an eXtensible Markup Language (XML) Technology. Subsequently, this information could be transferred to the database of a maintenance control system, where they could be evaluated through a distribution and correlation analysis with their own software. Hence enabling scores and creating a suitable environment for analyzing reliability, thus identifying existing mechanism failures within the installations and probable statistic tendencies. 5.

OUTCOME

This Balanced Scorecard was highlighted from results obtained throughout various tools used during the development of this paper, with which the company’s board of directors, management and technical staff carried out many meetings during December 2009, to score through future workable goals to be practiced from January 2010. Figure 4 represents the hereby mentioned strategic map:

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Figure 4: Balanced Scorecard. Source: (Authors, 2010) This scoreboard, originated from various debates, illustrates the main points to be worked on, so that the company may be definitely considered a model for the Interstate Transportat System segment, thus providing better quality services to consumers. Amid this scenario, the managers have structured the above mentioned scoreboard within four perspectives: Financial; Market; Internal Processes and People. As for Financial perspectives, there are five aspects to be taken in consideration: aiming effective outcomes (sales increase, growth and profits); regulating the financial situation and generating cash flow; producing a 6% liquid profit per month and saving a part of it for expansion; eliminating squandering with corrective maintenance actions; and searching for financing sources in order to grow and expand into new markets. Within this context, when the subject is maintenance, enterprise managers have perceived that many problems related to this subject are due to a lack of systems with the ability of signalizing the companyâ&#x20AC;&#x2122;s actual situation and with the capacity to also integrate all types of information. Regarding to Market perspectives, managers have delineated seven important parameters, as follows: developing a preventive model for failures; developing service models; new partners working towards the construction of a consolidate enterprise image; expansion planning and fleet and route management; new businesses scheming; and analyzing correlative markets. These guidelines are intrinsically linked, since all problems that the company had been facing in a recent past and which had been provoking negative consequences, were directly linked to its maintenance; from then on and in order to improve their market image, they begun to develop a new failure prevention model, with a R$7 million investment on Technical Support Systems and Information. Thus new failure prevention models were designed, causing faults to be examined and noticed JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 577-596

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beforehand, together with service models developed and performed to work efficiently faster. It has become evident that regarding Internal Processes, managers have started to worry about: Corrective Maintenance; consolidating Informatics application and tools; organizing the financial managerial field; structuring performance indicators; implementing information management; implementing SAD; and organizing mechanical workshops and maintenance so to minimize costs and maximize processes; thus; searching for a better appreciation of human management in their processes. Another important point to be highlighted in this article is that before implementing the computational model, data remained totally disperse, that is to say, no information integration was available. Resulting in an excessive time demand for managers while analyzing a problem, consequently, delaying decision-making, as shown in a diagram form by Figure 5 below:

Figure 5 – Scenario for Before and After Implementing Computational Model. Source: Authors, 2010

It became clear that many of the gathered variables by the new system were minimized and surveyed, as for instance, the feature “decision-making duration” which in the past, because of information dispersion, was most tardy. With the new computational model we have regained around a 40% “speed of response to failure”. With this new computational model, information is upgraded with speed since, while dealing with it, those professionals involved have become alert and aware of how to interpret what is going on, thus the employee knows how to proceed and monitor every happening.

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FINAL CONSIDERATIONS

Results in this paper have presented meaningful gains for operational issues, as well as for features related to fleet vehicle business procedures and management, mainly for the organization linked to the Interstate Road Transport System. Another important aspect that deserves to be highlighted is the significant time decrease for decision-making. Time slackening for information withdrawal, data unification into a single and reliable repository, paper flux reduction for decisionmaking process and information dissemination to other fields of the organization have led to the strengthening of operational systems, maintenance and strategy itself. Pertinent to the strategic question, it has become evident that the proposed computational model integrated to the Balanced Scorecard method was very useful, while implementing the Balanced Scorecard, where we have the possibility to diagnose failures and anomalies. Related to strategy amid the surveyed company, what mostly called the managers’ attention was the wastefulness resulting from a corrective maintenance. With the approach of maintenance centralized on reliability, conceived from the researcher’s interface with the company, proposing statistically demonstrated indicators, all the wastefulness of the company became evident. Within this context, the company has also started to search for new partners, that like them, work on a philosophy based on reliability, in such a manner that their corporate image may consolidate not only in their clients but also in their suppliers, in employees, and in all those participating in the productive chain. Then, it will be possible to work with new businesses and service goods aimed at farthest places, for instance, offering trips to Brazil´s neighbor countries, while collecting and distributing goods fortransportat services scheduled in the same trip, thus benefiting from the same vehicle for the service. This was due to a decrease of vehicle breakdowns and guaranteed fleet availability, enabling a wide and new range of business offers. Regarding internal processes, this survey has been of determinant impact on the managerial decision-making process of the company, while verifying the possibility of consolidating proper tools for decision-making support, as well as the implementation of Managerial Information Systems together with management Indicators. While analyzing “People’s” perspective, managers realized the urgency to entitle employees; develop citizens; provide stimulus and participation. This is a natural process, since when various tools are proposed where information is supplied, there still remains the need to delegate to employees, so that they may interpret data and information and also be able to execute. The oldest employees should be properly trained, since most of them still bring with themselves the mentality that all this progress going on is only a trend and/or that everything has always worked that way and will continue the same. Yet amid this strategic scenario, a new computational model has given strategic mobility to the company in order to simulate results, preview failure tendencies and model new environments. Another significant outcome for this survey, deals with accessibility simulation and analysis for synthetic data as well as for data analytical sampling. Computational

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tools carry deep insight on business intelligence, thus aiding with simulations and queries generated through an OLAP search and favoring access to key performance indicators of the company. Perhaps, it may be affirmed that the initially proposed objectives for this paper have been attained and that adopting the hereby dealt with computational resources, supported by the case study, have brought competitive advantages to business and to the environment among which this survey was carried out. 7.

LIMITATIONS AND SUGGESTIONS

Amid continuity possibilities for the same research line, surveys that enable a deep analysis on reliable strategic indicators in different surroundings may be enhanced as appropriate. Another continuity possibility for this survey is related to knowledge management application for RCM systems through software and modeling supported by decision-making as its primary tool. Increasing the number of evaluated variables for the Data Warehouse model, or else trying to understand a new model of Information Load that enables diminishing data loading duration and quality of generated data are all also possibilities for enlarging this research. Still further in this aspect, it is recommended that the proposed model may be compared to other computational tools focused on business management linked to maintenance, as for instance; Reliability Engineering (Weibull distribution), RCM, MCC, XFMEA. Lastly, trying to implement an RCM process with knowledge systems like CommonKADS, which stimulates integration between software engineering and knowledge engineering, suggests other research lines. REFERENCES Almeida Junior., J. R. (2003). Segurança em Sistemas Críticos e em Sistemas de Informação: Um Estudo Comparativo, São Paulo, 191 p. Tese – Escola Politécnica da Universidade de São Paulo. Campos, F. C., (1999). Proposta de interface para apoio à gestão da manutenção de frotas de Veículos. São Carlos, 247 p. Teses (Doutorado) – Escola de Engenharia de São Carlos, Universidade de São Paulo. Elmasri, R.; Navathe, S. B. (2002). Sistemas de banco de dados: fundamentos e aplicações. Rio de Janeiro: LTC. Gil, A. C. (2002). Como elaborar projetos de pesquisa. São Paulo: Atlas. Godoy, E. P. (2007). Desenvolvimento de uma ferramenta de análise de desempenho de redes CAN (Controller Area Network) para aplicações em sistemas agrícolas. Dissertação (Mestrado em Engenharia) - Escola de Engenharia de São Carlos, Universidade de São Paulo. São Carlos.

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IEC – Functional Safety Electrical/Electronic/Programmable – IEC 61508-1 STD 41997 . (1997). Electronic Safely Related Systems. International Electrotechnical Comission. Inmon, W. H.; Hackarthorn, R. D. (1997). Como usar o Data Warehouse. Rio de Janeiro: IBPI Press. JQME, Journal Of Quality In Maintenance Engineering. (2010). Maintenance Information Systems, in Emeral, ISSN 1355-2511, January. Kaplan, R. S.; Norton, D. P. (1997). A estratégia em ação: balanced scorecard. Rio de Janeiro: Elsevier. ________. (2000). A organização orientada para a estratégia: como as empresas que adotam o balanced scorecard prosperam no novo ambiente de negócios. Rio de Janeiro: Campus. Kimball, R. (1998). Data Warehouse. São Paulo: Makron Books. Marçal, R. F. M.; Susin, A. A. (2005). Detectando falhas incipientes em máquinas rotativas. Revista Gestão Industrial. 1(21), p. 87. Miguel, P. A.C. (org.) (2010). Metodologia de pesquisa em engenharia de produção e gestão de operações. Rio de Janeiro: Elsevier. Nunes, E. L.; Valladares, A. (2002). Potencialidades da MCC para a gestão integrada da manutenção e da mudança de organizações. XXII Encontro Nacional de Engenharia de Produção Curitiba – PR, 23 a 25 de outubro de 2002. O’brien, J. A. (2008). Sistemas de informação e as decisões gerenciais na era da internet. São Paulo: Saraiva. Oliveira, A., (2010). Análise inteligente de falhas para apoiar decisões estratégicas em projetos críticos, Tese apresentada na Universidade de São Paulo. Pinto, A. K.; Xavier, J. N. (2001). Manutenção: função estratégica. Rio de Janeiro: Qualitymark. Rausand, M.; Hoyland, A. (2004). System reliability theory: models, statistical methods and applications. N. York: Wiley. Santos, J. E., (2001). Considerações sobre o processo de manutenção para empresas operadoras de ônibus urbanos de porte médio. Brasília, 177 p. Dissertação de Mestrado – Universidade de Brasília. Singh, H. S. (2001). Data Warehouse: conceitos, tecnologias, implementação e gerenciamento. São Paulo: Makron Books. Siqueira, I. P. (2009). Manutenção centrada na confiabilidade: manual de implementação. Rio de Janeiro: Qualitymark. Slack, N.; Chambers, S.; Johnston, R. (2007). Administração de Produção. São Paulo: Atlas. Sommerville, I. (2007). Engenharia de Software. São Paulo: Addison Wesley. Son, Y. T.; Kim, B. Y.; Park, K. J.; Lee, H. Y.; Kim, H. J.; Suh, M. W. (2009). Study of RCM-based maintenance planning for complex structures using soft computing technique. International Journal of Automotive Technology.10(5), p.635-644.

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Souza, S. S.; Lima, C. R. C. (2003). Manutenção Centrada em Confiabilidade como ferramenta estratégica. XXIII Encontro Nac. de Eng. de Produção - Ouro Preto, MG, Brasil. Villemeur, A. (1992). Reliability, Availability, Maintainability and Safety Assessment. Assessment, Hardware, Software and Human Factors. John Wiley & Sons.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.597-620 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300008

IT MANAGEMENT MODEL FOR FINANCIAL REPORT ISSUANCE AND REGULATORY AND LEGAL COMPLIANCE José Rogério Poggio Moreira Universidade Salvador (UNIFACS) – Salvador, Bahia, Brazil Paulo Caetano da Silva Universidade Salvador (UNIFACS) - Salvador, Bahia, Brazil __________________________________________________________________________

ABSTRACT The development of information systems for financial report issuance must be adherent to the demands of the law and regulations that regulate the financial market. In order to perform this task, organizations need to implement control in the Information Technology (IT) area to maintain their systems´ conformity to laws and regulations. In the development of this work, it was found, through a state-of-art study, that there are no proposals contemplating the solution of this problem in its totality. In order to achieve this goal, in this paper it is presented a model for Information Technology management constituted by COBIT, ITIL and BPM management good practices, together with SOA and XBRL Technologies. This model is composed by 03 layers that aim at structuring the organization IT and business processes, besides defining a process for implementing SOA and integrating its Web services with XBRL language. One can expect this work to contribute to companies to decrease the negative impact coming from the lack of conformity with laws and regulations, through the creation of a corporative and IT environment that is flexible and more adaptable to changes, which may occur in legal demands, as well as improving the quality and reliability of financial report issuance. Keywords: BPM, COBIT, IT, ITIL, SOA, XBRL Governance. _____________________________________________________________________________________ Manuscript first received/Recebido em 07/03/2012 Manuscript accepted/Aprovado em: 19/06/2013 Address for correspondence / Endereço para correspondência

José Rogério Poggio Moreira é graduado em Sistemas de Informação pelo Centro Universitário Jorge Amado (2009). Pós graduado em Qualidade e Governança de TI pela Faculdade Ruy Barbosa. Atualmente é mestrando em Sistemas e Computação, pela Universidade Salvador (UNIFACS) e trabalha como analista de sistemas no Ministério Público. Possui experiência na área de Engenharia de Software, Qualidade e Governança de TI e Gerência de Projetos, atuando com os temas: COBIT, ITIL, BPM, SOX, SOA E XBRL. E-mail: rogerio.poggio@gmail.com Paulo Caetano da Silva is graduated in Chemical Engineering by Bahia Federal University (1985). Master in Computer Networks by Salvador University - UNIFACS (2003). Doctor in Computer Sciences (2010) by Pernambuco Federal University. Currently is a professor at Salvador University (UNIFACS) at Master’s program in Systems and Computing, as well as an analyst at Central Bank of Brazil. He holds experience in the area of computer sciences, focused in Software Engineering, Database, SOA and XML, acting mainly in XBRL, OLAP for XML, information systems, Web and financial information. Email: paulo.caetano@pro.unifacs.br Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

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INTRODUCTION

This work development was performed based on research regarding management and governance good practices in the area of information technology, as well as on the identification and analysis of XBRL language and service oriented architecture technical features for applying only concepts that are necessary to the context of the problem in question. It was also performed bibliographic research consisting in the reading of academic texts and papers and study of COBIT, ITIL and BPM technical specifications. In this phase of the work, non-existences and limitations of elements defined in proposals similar to this work were found. The solution presented in this article aimed at contemplating theses deficiencies through the proposition of a model of management and governance for creating and releasing financial reports in the organizations that must be in conformity with specific laws and regulations for this purpose. The proposed model development was performed in parts, being divided in layers, so its implementation in the organizations may be performed iteratively and independently, allowing that the layers that attend the organization needs are implemented independently. However, a case study was not performed due to the proposal complexity, which would make its practical application unviable in a well-timed occasion. The evolution in the area of Information Technology (IT) has taken place through diverse factors; one of them occurs due to the legislations that the organizations must follow. Sarbanes-Oxley law â&#x20AC;&#x201C; SOX (ITGI, 2006) was one of the laws that significantly impacted the IT area, increasing its relevance in the organizations that must be in conformity with this law (Guerra, 2007). In this context, the organizations performed more investments in IT and valued the bond that the IT area maintains with the organization strategic goals, making the development in the IT area a critical factor for organizational success, as well as a competitive differention in the market. To help with the conformity with legal demands, according to Guerra (2007), companiesÂ´ IT areas have started to adopt Control Objectives for Information and Related Technology (COBIT) (ITGI, 2007a), because COBIT defines what the goals that IT controls must conform with are, in order to satisfy SOX (ITGI, 2006). COBIT is a good management practice, independently of the technological platform, which helps IT governance to structure a monitoring process to check and measure processes. Through COBIT, the companies are able to assure that IT will be aligned to businesses goals, which involve laws, and, therefore, obtain competitive advantages for the organizations businesses (ITGI, 2007a). Another good IT management practice, which combined with COBIT helps organizations to be conformed to laws and regulations, is ITIL. ITIL is a set of good practices regarding life cycle management of IT infrastructure services focused on business. With COBIT, the organization determines control criteria and goals to be reached by IT processes and, through the use of ITIL, these IT processes are structured and defined. OrganizationsÂ´ business processes, not only IT processes, also need to be well controlled and defined so the company may establish the control points required by laws and regulations. A good practice for managing processes that conform to this need is Business Process Management (BPM) (BPMN, 2006). With BPM it is possible not only to select and align business critical processes to the organization strategy, but also to create a mechanism for structuring, evaluating, measuring and controlling the business processes. JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 597-620

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Although COBIT, ITIL and BPM enable the creation of an IT and corporative environment that contributes to the conformity required by laws and regulations, companies must deal with issues related to the diversity of data format that contributes to the creation of financial reports. It increases significantly: (i) the time of financial report issuance, due to the efforts towards data transformation; (ii) the costs coming from these efforts performance and; (iii) the risks of errors occurrence, decreasing, furthermore, report reliability and generating, consequently, negative impacts on the business. The usage of two technologies together, SOA (Erl, 2009) and XBRL (Silva, 2003, 2002), may contribute to the improvement of problems related to the format diversity of financial data and provide a better adaptation capacity of the information systems for changes in business processes. The Extensible Business Reporting Language (XBRL) is an international standard adopted by companies of public and private areas, which contributes to solving the problem related to the diversification of financial information data format (Silva, 2003). XBRL provides a structure that enables data and financial information interchange and consequently data integration, which are found in different formats and in different information systems. The Service Oriented Technology (Erl, 2009) or SOA (acronym for Service Oriented Architecture) that has as its main goal, in the context of this paper, to facilitate services creation (SOA applications) that will automatize the business processes related to the organizationÂ´s financial and accounting areas. SOA allows the construction of more flexible and adaptable applications to the changes in business processes. Through the analysis of the good practices and technologies discussed in this section and the lack of a model of IT management that attend the needs that the organization have, in order to conform its IT and corporative environment to the laws and regulations, it is seen the necessity of proposing a structured model for IT management that integrate these good practices and technologies (COBIT, ITIL, BPM, SOA and XBRL) in order to contribute to issue financial reports and improve the organizationsÂ´ adherence to laws and regulations. The rest of this article is organized as follows. Section 02 presents correlate works that were analyzed and subsidies the construction of the model. Section 03 details the structure of the model of IT management. Finally, in Section 04 the conclusions and final considerations of this article are made. Correlative Works In this section, it is performed an analysis of the works related to the IT management structured model proposed in this paper. (Biancolino & Critofoli, 2008) performed an analysis of SOA and XBRL technologies, which constitute an important resource that may be used by controllers, in order to provide an IT solution that would provide a link between the business demands and regulatory departments. Through the analysis performed, the authors concluded that SOA is a facilitator for corporative information systems as modulator of business services that can be easily integrated and reused, creating a flexible and adaptable IT infrastructure. The analysis performed for XBRL technology, however, has highlighted the importance this language holds in the financial area, due to the facility offered in sharing and searching financial information in the context of organizational information systems. Nevertheless, although other authors highlight the importance of these technologies, for the accountant area and for the issuance of financial reports, in order to successfully develop information systems through SOA and XBRL, they do not discuss

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business processes structuring. (Gluchowski & Pastwa, 2006) have proposed to investigate reliable and fast ways of performing financial and business data interchange through SOA, with Web Services and XBRL technologies, in order to eliminate problems related to the issuance of financial reports and making the business processes more flexible. The authors presented a proposal of how to develop financial information systems, through SOA with Web Services and XBRL, and discussed the benefits that the services would bring to financial report issuance. However, the business processes organization was not discussed. The work of (Waldman, 2009) aimed at describing a script for performing the SOA implementation in medium and large size corporations. In order to do that, the author suggests that the implementation be done in phases, starting, firstly, with a single system that is small and simple. From the success of the first implementation, according to (Waldman, 2009), the same process should be repeated in other systems, until it is performed in the whole organization. If the evaluation of the first implementation is not satisfactory, new attempts must be made until the organization is familiarized and confident with the new concept (SOA) and, thus, it may advance to other systems. However, this work does not fill the gap regarding the alignment of SOA applications with business processes, and it does not discuss deeply the phases of SOA implementation and the relation of SOA with IT governance. The work of (Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010) aimed at describing BPM good practices, contributes to its implementation in a corporative environment. The authors then created a life cycle model for implementing and maintaining processes management, using BPM in the companies. According to the authors, the benefits generated by the model proposed are: (i) creating improvement goals; (ii) eliminating reworks; (iii) aligning the activities to the company strategies; (iv) standardizing tasks and; (v) improving information for the information systems present in the companies. Nevertheless, this work has not discussed the relation of the good practices of management processes, using BPM, with the SOA application, nor has treated the aspects related to IT processes that will support the SOA services. (Moreira, 2009) proposed a methodology that integrates COBIT with ITIL, in order to implement IT governance in the organizations that need to be in conformity with Sarbanes-Oxley Law. Through the phases and files proposed in the methodology, the organizations might be able to have their IT processes well defined and controlled, which contribute to better attending the needs of the information systems, besides providing an improvement in the company business processes. With the integration of these good practices, according to (Moreira, 2009), the company that implements IT management will get the possibility, through the usage of COBIT, of: (i) strategically aligning IT with the business; (ii) selecting the organization critical processes and that have a bad performance, so they may be improved; (iii) identifying the company risk profile and evaluating the risks related to the services that are being delivered; (iv) evaluating the maturity of the more critical processes for the business and aligning them to a level of ideal maturity in an efficient way, through the improvement projects. Through the ITIL good practices, however, the work of (Moraes, 2009) aims at structuring IT processes in an efficient way so that these processes may reach their control goals defined by COBIT, making them better projected, controlled and enabling them to generate more benefits for the business, as well as attending the demands of Sarbanes-Okley Law. Although providing well defined and controlled IT processes, through the proposed methodology, the author does not discuss business processes management.

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2. IT MANAGEMENT STRUCTURED MODEL The IT management structured model proposed, in this work, is based on good management practices such as BPM, COBIT and ITIL and on SOA and XBRL technologies. Its architecture was developed from the problems discussed in Section 01 and the analysis of good practices and technologies discussed in Section 02. This section is organized in the following way: Section 3.1 presents the IT management model together with the elements that compose its structure, after that, in Section 3.2, the aspects related to the business process layer of the IT management model are discussed, Section 3.3 describes the layer related to the model IT processes and Section 3.4 presents the layer related to SOA and XBRL technologies. 2.1

Model Structure

The proposed model goal is to provide subsides of management and governance so that companies may be more adherent to the laws and regulations by which they abide, and so that they can improve the quality and reliability of the financial report issuance. In order to provide a better understanding, visualization and grouping of the involved practices and technologies, the proposed model is divided into three layers, as it can be seen in Figure 3.1. Each layer has management associated good practices or technologies to allow them to reach their goals. The model is organized in phases, which have activities that may be subdivides into tasks. It is important to emphasize that the sequence of the model layers execution, as it can be seen in Figure 3.1, was defined with the assumption that the company needs to have, before developing SOA services, business processes which are defined and aligned to the organization strategy and IT processes which are structured and aligned to the business goals, towards IT. The layers execution order is justified, because the business processes will originate the functionalities and information, which will be automatized and stored through the SOA services. If the processes do not work, due to their loss of structure, lack of maturity or inefficiency, there is no point for a company, with these processes, in adopting SOA architecture for developing and maintaining information systems. SOA architecture will not improve the performance of non-structured business processes, once they originate the flows and information for SOA services. Another aspect that justifies the sequence of execution established for the management model proposed regards services construction. In order to do that, it is necessary that the company has an IT process structure that maintains the development and the evolution of the services, in a way that they generate the expected results for the company. Although the proposed model establishes an execution order for the layers, these may be executed independently from one another. This is important because not all the companies have the need of implementing all the layers, due to, for example, the fact that they already have their IT or business processes management structure. Thus, the companies that are in this context may use the model layers as a reference to maturate their practices and develop new initiatives. The main goals of the three layers that compose the proposed model are: (i) Business Processes Layer: In this layer, the aspects related to such organization business processes as controlling, optimizing, evaluation, selection,

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identification and planning are discussed, based on the company strategic priorities. The model is then based on BPM good practices. In this layer, it is discussed the whole life cycle adopted so that the organization business processes can evolve and become mature over time. This layer contributes to the creation of IT and corporative environment, through BPM good practices; (ii) IT Processes Layer: In this layer, the aspects of IT processes management that enable the organizations to implement IT governance are discussed. In this layer, COBIT and ITIL good practices are used to identify business and IT goals, selecting the IT processes, perform analysis and diagnoses and implement the processes and improvements projected for them. This layer, like the Business Processes layer, also contributes to the creation of a more adherent IT and corporative environment to laws and regulations; (iii) SOA and XBRL Layer: In this layer, the aspects related to SOA implementation and risk control and identification, coming from this implementation, are treated. Another aspect is SOA integration, through the Web Services, with XBRL, enabling, this way, information systems that are more flexible, connectable and aligned to the business processes, besides improving the quality and reliability if integrated with financial reports issuance. The following subsections discuss each one of the model architecture layers.

Figure 3.1. IT Management Structured Model. 2.2

Business Processes Layer

This layer treats the aspects related to business processes management, using BPM good practices. This layer application is performed through some tools, techniques, and reference business process management maturity models. This layer, through the business process management structure provided by BPM good practices, contributes to the creation of a technological and corporative environment which is

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more adherent to laws and regulations and more suitable to the efficient generation of financial reports. The BPM life cycle model proposed in this paper, as it can be seen in Figure 3.2, is based on that proposed by (Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010), being composed by 04 phases that will be discussed in the following subsections.

Figure 3.2. Business Layer Life Cycle. 2.2.1

Planning Phase

This phase defines BPM activities that will be able to contribute to reaching the organization strategic, management and operational goals (Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010). It is relevant to emphasize that administrative initiatives involve organization internal processes, implicating, most of the times, interest conflicts and lack of comprehension of the goals. Because of that, it is very important the support from the top management of companies that wish to use BPM, because it may compromise directly the success and continuity of BPM. This phase has two goals. The first is to select the critical business processes for the company. The second is to provide a holistic view and the business processes alignment to the organization strategy, through the development of a global vision of the processes. In this phase, the entrances are obtained through the strategic planning, external environment, laws and regulations and opportunities and threats. This phase generates as an exit, the guidelines and specifications necessary to the performance of the modeling and optimization of the processes, which is performed in the project phase. The main activities in this phase are: (i)

Develop a global vision of the processes, allowing the company to have a general vision of relationships among processes and starting an alignment of the processes with the company strategy. This activity is relevant for the company to have a better understanding of the functioning and the relationship between the processes, from the strategic level to the operational level. A better understanding of how the processes relate to each other is expected, improving, thus, the model projects and isolated process studies. The development of a global vision

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(ii)

2.2.2

of processes must be performed before initiating a project of BPM practices inclusion; Select the company key processes, defining in which of processes (strategic, management or operational) the organization is stronger, weaker, which the weak spots are, which threats and opportunities are presented, which indicators were defined. It is important to observe that some processes, not necessarily processes with quality, cost and deadline problems, may be optimized so the company obtains a better cost and deadline reduction, even if the process is perfectly working. It must be performed a classification by order of priority of the organization business processes, giving attention to the processes that need immediate solutions. Project Phase

This life cycle phase aims at performing the study of the current situation of the organization processes and proposes a better future situation for each one of the selected processes. This phase goals are: (i) documenting the processes; (ii) employing methodologies to optimize the processes; (iii) redrawing and innovate the processes; (iv) performing BPM benchmarking (technique that allows defining, understanding and develop processes through the study of how other organizations perform the same activities) (Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010) and; (v) performing simulations. This phase is formed by two large activities: (i) modeling the process current state and; (ii) modeling the process desired state. Before starting the modeling project, it is necessary to analyze specifications and guidelines that were generated in the planning phase. It also important to analyze the global vision of the processes so that the company can define the number of subprocesses related to the process that will be modeled and, thus, estimate the effort and the resources necessary to perform the modeling. a) Current State Modeling This activity, in the Project phase, aims at understanding the existing process and identifying its failures so that the errors previously made are not repeated. The current state modeling involves the following tasks: (i) planning the modeling; (ii) collecting information about the process, identifying possible improvement points; (iii) modeling the process; (iv) validating the process and adjusting, if necessary, the discrepancies between the model of the process modeled in this activity and the process that is in execution. This is necessary for confirming if the process that was modeled, in this activity and based on the process that is in execution, does not have any inconsistent data and if the data is precisely represented. b) Desired State Modeling The desired state modeling provides improvements in the process under analyses. To do so, this activity involves tasks: (i) selecting improvement techniques; (ii) model process and; (iii) simulating and validating processes. Among the techniques that may be used, are (Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010): (i)

Continuous Improvement: that seeks to continuously establish goals and identifies improvement opportunities through critical analysis performed regarding process data, audit reports and other sources.

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(ii)

FAST (Fast Analyses Solution Technique): allows the rapid improvement of a process, giving immediate returns to the organization (Harrington, Esseling and Nimwegen, 1997);

(iii)

Benchmarking: allows defining, understanding and creatively developing the processes through the study of how other organizations perform the same activity.

(iv)

Redrawing: aims at refining the current process. This technique is applicable to processes that are not good and;

(v)

Innovation: consists in a more severe approach of process improvement, providing a totally new vision of the current process.

Each one of the presented techniques results in improvements and cost reduction, time and margin of error for the process. The definition of which technique or techniques combination must be used will depend a lot on the organization needs and importance of the process for the business. This way, each organization must choose and perform the necessary techniques association to achieve the desired result., from the analyses performed in the process, based on its importance for the business and factors such as execution time and process cost, as well as competitiveness that the business demands. 2.2.3

Implantation Phase

This phase is responsible for the optimized process implantation. Among the activities that compose this phase, are: (i) training and empowering users and; (ii) implementing the process. This phase puts in practice what was defined in the project phase. It is a critical phase, because it is at this moment that the process will start to be executed by the users and the negative and positive impacts of the changes performed in the process will be actually put in practice. Baldam, Valle, Pereira, Hilst, Abreu and Sobral (2010) assert that the process implantation be treated as a specific project, being able to be managed through the good practices of Project Management Institute (PMI) (PMI, 2008). The processes implantation may demand the creation of subprojects for configuration, customization or even creation of specific information systems for the process being discussed, although the process execution does not necessarily demand these systems. 2.2.4

Control and Monitoring Phase

This phase performs the monitoring and control of the processes in execution, aiming at maintaining them inside the planned goals. The monitoring and control provide the decision makers with information regarding the process behavior, allowing one to analyze if the processes are in conformity with what is expected and if they attend the needs of organizationÂ´s strategies (Baldam, Valle, Pereira, Hilst, Abreu e Sobral, 2010). This phase provides the necessary feedback to the planning and BPM life cycle project phases. Among the activities that compose this phase are: (i) monitor and control the process and; (ii) evaluate the results. 2.3

IT Processes Layer

This layer treats the aspects related to the IT process management and the implementation of an IT governance program, enabling the creation of a more efficient and manageable corporative and technological environment, which is adherent to laws and regulations. In order to that, the IT management model proposed uses COBIT and ITIL good practices.

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This layer is divided into four sequential phases that have activities directed to achieve each phase goals. The phases that compose this layer are: (i) Initiation: this phase mainly aims at identifyingIT needs and selecting the processes that must be reorganized inside the organization based on the business priorities and IT risks in the company. (ii) Evaluation and Diagnoses: this phase mainly aims at providing the solution for the IT area needs, based on the critical processes selected through the IT goals and the business goals; (iii) Planning Improvement Projects: this phase mainly aims at organizing and defining the projects that must be aligned with the organization business for implementing IT governance based on improvements proposed by the evaluation and diagnoses phase; (iv) Execution: this phase mainly aims at executing the improvement projects that were created in the previous phase. Initially, in order to achieve the goals of the two first phases, the IT management model uses COBIT. ITIL will be, initially, used in the GAP analyses activity (that will be explained in section 3.3.2) that belongs to the evaluation and diagnoses phase. Thereafter, in the planning and execution phases, ITIL will be used to perform the definitions of the improvement projects and to implement these processes. However, in the planning and execution phases, COBIT also may be used as a reference to clarify issues related to the goals and practices of control associated to the IT processes that are part of the improvement projects. A detailed view of the structure of this layer may be seen in Figure 3.3.

Figure 3.3. IT Layer Life Cycle. 2.3.1

Starting Phase

This phase is responsible for identifying IT area goals and business goals towards IT, obtained through the analysis of the companyÂ´s strategic planning together with other documents such as, for example, Balance Scored Card (BSC) (Kaplan and Norton, 1997). It is relevant to emphasize that activities related to obtaining strategic planning and the company BSC are out of the scope of the model proposed in this work.

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In this phase IT process selection takes place, based on IT goals, taking into account the company operating area and identification and evaluation of IT risks that are related to the organization. This phase is composed of 03 activities: (i)

Identifying Goals: this activity comprehend the identification of business goals towards IT area and IT goals. IT goals are selected from the business goals that satisfy the companyÂ´s corporative strategy. Thus, the IT goals selected are part of an IT area strategy that is aligned to the corporative strategy to satisfy the company business goals. COBIT is used in this activity to perform the mapping between the organization corporative goals and the business goals towards IT (ITGI, 2007a).

(ii)

Selecting Processes: this activity aims at selecting IT processes that are critical for the organization business. After identifying the IT goals, it is possible to identify associated processes, which will assure that the IT goal is satisfied.

(iii)

Identifying and Evaluating Risks: this activity mainly aims at identifying IT risks related to the company that may affect the IT governance implementation program. In order to do so, according to ITGI (2007b), it is necessary to understand how the company administration treats the issues regarding risks, so it is possible to identify the company risk treatment profile. Once the profile is identified, risks related to business goals and IT goals and processes need to be identified. One must analyze and document all the relevant threats and vulnerabilities, as well as their respective impacts over the services that are currently delivered by the company IT area and that are related to the business goals and to the IT goals and processes that were selected (ITGI, 2007b). After identifying the risks related to the services delivered by the company IT area, one must identify and relate the risks concerning IT governance implementation, in what regards new developments and activities executed by the IT governance program. Once the risks are identified, one must define how they will be treated.

2.3.2

Evaluation and Diagnoses Phase

This phase mainly aims at evaluating and diagnosing IT area needs based on critical processes that were selected through IT goals and business goals. This possible solution is suggested based on the analysis and diagnoses performed in critical processes, in a way that the current situation and which future goals the organization wishes for these processes are understood, considering the distance between the current state and the wished state and the business priorities. This phase is divided in 03 activities: (i)

Evaluating current situation: this activity mainly aims at evaluating the current maturity of the processes that were selected in the initiation phase. This activity is responsible for the understanding of how the processes, which were selected, are being executed and managed inside the company. COBIT is used in this activity through its maturity model, which is based on the CMM maturity model (ITGI, 2007a). Through this model it is possible to measure the selected processes current stage and to establish an improvement goal for these processes.

(ii)

Defining Ideal Situation: this activity mainly aims at establishing the ideal maturity level for the critical processes that were selected in this

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first phase layer. This definition, the ideal maturity level definition, must be done by taking into account the IT process importance for the company business and IT area and the entries and exits obtained and generated by the analyzed process. One can also perform a benchmarking to analyze similar processes at the current maturity levels in the companies, which operate in the same market segment, so the company has an external comparison for analysis and decision making purposes. (iii)

2.3.3

Analyzing GAP: this activity mainly aims at analyzing the selected processes at thecurrent maturity level together with the ideal maturity level, translating into improvement opportunities for the process. In order to do so, one must determine, for each one of the analyzed processes, the cause of problems, the existing risks, the common related issues and the good practices and standards that may help to eliminate the gap between the current maturity level and the ideal one for a determined IT process. Improvement Project Planning Phase

This phase mainly aims at planning the improvement projects based on improvements proposed by the GAP analysis activity, performed in the evaluation and diagnoses phase, in Section 3.3.2. These improvements are projected and executed through ITIL good practices, taking into account COBIT control practices. This phase is composed of 02 activities: (i)

Defining Improvement Projects: this activity mainly aims at transforming the improvements proposed in the evaluation and diagnoses phase into projects that will be later added to the IT governance implantation program. These improvements are the ITIL set of control goals, control practices and best practices that were related in the evaluation and diagnoses to achieve the established maturity level. For each project, the organization must establish a priority that might be based on the analysis performed in the aspects related to the project cost, deadline, importance for the business and benefits that will be generated. After this analysis, the approved projects will move to the next activity.

(ii)

Developing Action Plan: this activity basically sums up in defining the sequence in which the approved projects will be executed. This sequence may be defined taking into account the priority that each project had in the previous activity. It is relevant that the company have an efficient change control, in order to guarantee that all activities that are necessary and included in the projectes are controlled, and so that any change is documented, analyzed and approved, assuring that only the approved changes are implemented, avoiding, thus, losses. This change control may be performed by the usage of Project Management Institute (PMI) project management good practices (PMI, 2008).

2.3.4

Execution Phase

This phase mainly aims at performing the improvement project implementation, using the ITIL good practices and COBIT control practices considerations. In this phase, it is also important to use PMI project management good practices to assure that the results desired for the business are obtained, through the improvement projects execution. This phase has 02 activities:

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(i)

Executing Improvement Projects: this activity consists in executing all of the improvement projects, which were approved in this layer planning phase, according to the sequence defined by project prioritization. The whole improvement project implementation must use ITIL good practices, so that the processes that are being improved or implanted are reorganized or structured in an efficient way. This activity is also responsible for acquiring, developing, testing and executing the solutions that better satisfy the projectsÂ´ goals, so, in the end, the IT governance implementation program goals are achieved (ITGI, 2007b).

(ii)

Evaluating Results: this activity aims at evaluating experiences and results obtained from the IT governance implementation program, registering and sharing the lessons learned. This activity allows the organization to evaluate what IT governance implementation program is delivered, comparing the expectations of the involved ones. This may be obtained through the comparison of original information criteria in relation to the ones obtained and combining it to a program implantation staff evaluation, together with the evaluation of the ones involved in the program. This evaluation may be performed through workshops, satisfaction surveys and interviews. It is also relevant to register and share the lessons learned, because they contain relevant information that may be used not only by the program staff, but also in future projects of process improvement. This way, the steps for concluding this activity are: (i) combining the satisfaction survey evaluation, interviews and workshops; (ii) comparing and reporting the obtained results in relation to what was initially proposed by the performed project and; (iii) promoting brainstorming with all the ones involved in the program to register the lessons learned. SOA and XBRL Layer

This layer treats the aspects related to SOA implementation, including risks management and SOA integration, through web services, with XBRL, enabling, thus, financial reports emission. In order to do that, an SOA implementation model is proposed. The model, through SOA services, aims at providing information systems which are more flexible, interoperable and aligned to business processes, providing more flexibility to the changes that happen in the organization business, due to the need of adequacy of the information systems to the changes that take place in legal requirements. This model contributes, through XBRL usage, for: (i) decreasing the need for financial data format transformation, due to XBRL being a technology used as a standard for data integration; (ii) decreasing the cost of data extraction, due to the usage of XBRL and; (iii) decreasing the error risk and, consequently, increasing the reliability of financial information, since it is not necessary to perform huge efforts to transform and extract data from different formats anymore (Silva, 2003). SOA implementation model considers the following aspects: (i) start SOA implementation through a single system, preferably a system that provides a good migration process. It is also important that the system is small and simple; (ii) repeat the same process for other systems, until it is performed for the whole organization and; (iii) perform services compositions for developing new information systems.

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Figure 3.4 presents SOA and XBRL layers, together with the model phases and the activities that compose them. As it is possible to observe, through Figure 3.4, SOA and XBRL layer implementation model lead the companies to the process of SOA adoption and integration of web services with XBRL language. The phases, together with the activities that are part of this layer and that compose the SOA implementation model, will be described in the following subsections.

Figure 3.4. SOA and XBRL Life Cycle Layer. 2.4.1

Organizational Needs Identification Phase

This phase aims at evaluating the organization current context, besides identifying the elements that will be transformed into SOA services, providing risk management. To do that, this phase contains the following activities: (i)

Evaluate Entrepreneurial Context

This activity aims at evaluating de company current scenario analyzing the following elements: (a) the business processes that should be already structured, defined and efficient; (b) the information systems, which automatize the business processes and from which the legacy components will be extracted to be transformed into services and; (c) governance structure or program necessary to structure and control IT processes, which will allow the adequate use of resources for developing and maintaining service oriented solutions. (ii)

Select Functionalities/Components

This activity concentrates in the selection of components or functionalities of the legacy systems that will be transformed into services. (iii)

Manage Risks

This activity aims at performing the risk management in SOA implementation. This activity is divided into two tasks: (a) identify and evaluate risks in SOA

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implementation and; (b) control risks in SOA implementation. These tasks are detailed below: a)

Identify and Evaluate Risks in SOA Implementation

This task identifies and evaluates the risks that are associated to SOA implementation. The SOA adoption process is susceptible to some occurrences that may be decisive to its conception and must be identified, because they might make SOA implementation in the organization not viable or suspend it. In this activity, some risks common to SOA implementations are also approached. Once the company risk treatment profile has already been defined in the phase of IT processes layer starting, Section 3.3.1, the risks related to SOA implementation must be identified. The risk identification in SOA implementation process must evaluate: (i) if the company technical staff understands what service oriented architecture is and if it has the capacity for its adoption; (ii) the legacy components that will be transformed into services and chosen in the SOA implementation planning activity; (iii) the company capacity in perform the changes that are necessary to realize the benefits of SOA implementation; (iv) the existence of IT governance and support from the top management; (v) the methodology of business processes management used and if there are well structured and efficient business processes; (vi) the budget designated to SOA adoption; (vii) the adequacy of risk management practices and methodologies. Once identified the risks, one must define how they will be treated. One must document how the risk management will be performed and register all the risks identified during this activity and along SOA implementation. The steps to successfully perform this task are: (i) identify the risks related to the services offered by the company; (ii) identify the risks that are related to new developments and activities that will be performed in SOA implantation and; (iii) define the treatment that will be given to find risks. b)

Control Risks in SOA Implementation

This task aims at providing the necessary support for the company to perform risk control in SOA implementation, through the IT management good practices that have been used to create the IT and corporative environment. The implementation of IT governance, through the usage of COBIT and ITIL good practices, and through a good business processes management, through the usage of BPM good practices, helps understanding, structuring, maintaining and evolving the process (IT and business ones) and guaranteeing a commitment from the top management. The usage of these good management practices contributes to controlling risks and threats that may appear in SOA implementation. The companies that want to avoid and control diverse factors (organizational or technical) that generate risks to the SOA implementation process must have a unique understanding about their IT and business processes and must guarantee full support from the top management, assuring, thus, the support from all the departments that are involved in the initiative. 2.4.2

Implementation Phase

This phaseÂ´s main goal is to develop the SOA solution that will attend the organization needs. In order to do so, this phase contains the following activity:

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(i)

Develop SOA Solution

This activity regards the survey of requirements, analysis and project, implementation and services test. It is relevant to emphasize that, in the analysis and project, one must consider the aspects related to the reuse and integration of the services that will compose the business solution. Normally, in order to perform the decomposition of business processes into IT services, a top-down (Marzullo, 2009) approach is adopted, as it is shown in Figure 3.5. According to this approach, a business process may be decomposed in several subprocesses, which may be unfolded into activities that, in the end, are divided into tasks. These tasks are automatized and consequently transformed into web services, which are grouped into modules that, once integrated, form the information system that automatizes the whole business process. In this activity, the integration of web services with XBRL language still happens.

Figure 3.5. Business process decomposition into IT services. Adapted from (Marzullo, 2009) The following subsection describes the task responsible for performing the integration between web services and XBRL.

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a) Integrate Web Services with XBRL The Web Services represent a way of implementing services in a service oriented architecture and provide an infrastructure independent from the platform, also making different technology integration and development easier. This task aims at integrating the Web Services with the XBRL language. In order to do so, illustrating architectural model and scenario were created, respectively, in addition to the integration architecture and process. The integration architectural model may be seen in Figure 3.6, which shows, through a layer division, how the integration between XBRL and the Web Services may happen. It is possible to observe in the model that Web Services usage is useful both to format XBRL data and to consolidate them in financial reports. However, initially, it is necessary to transform the legacy systems components into web services, responsible for the financial information, or to create web services for the legacy systems functionalities that relate them directly to the financial information that will be present in the financial reports to be issued. This is necessary so that the Web Services are able to extract the data from the legacy systems, put them in the XBRL format and later, through these data consolidation, create a financial report, performing, thus, the integration between the two technologies. An issue to be considered, in this architectural model, is that the business processes are the architectural model elements that direct, through regulations and laws by which they are linked, the needs of the XBRL documents that will be constructed by the organization through their Web Services.

Figure 3.6. SOA and XBRL Integration Architecture.

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An example of integration between SOA and XBRL may be visualized in Figure 3.7, which presents a situation where a multinational and open capital company that has 03 branches with distinct data systems and base send their financial information in XBRL format, through Web Services, to their main office, which consolidates this information in an integrated financial report to, later, send them to regulatory departments. In this context, the integration between XBRL and Web Services may happen in two distinct moments. The first moment happens in the XBRL file creation, when the Web Services will access the heterogenic data base to extract the data, converting them into XBRL format. The second moment happens in two situations: (i) when the company branches provide the Web Services that send the XBRL files to their main offices that represent the financial report for a certain month or year, so that they can be integrated in a single report and; (ii) when the organizations make Web Services available to send the XBRL file, which represent the integrated financial report for a certain month or year to the regulatory departments. The integration between XBRL and Web Services happens when the XBRL instance file is packed inside the SOAP message that will be transmitted. This way, right after the XBRL taxonomy definition or selection and the posterior XBRL file creation, it is possible to start the XBRL file packing inside the SOAP message so that it can be transmitted. It is important to emphasize that the defined taxonomy must be useful as a standard, because the XBRL file must be validated during its creation and after the SOAP message unpacking and, consequently, reception of the XBRL file for processing and for the financial report issuance.

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Figure 3.7. Financial Reports Issuance Scenario with Web Services and XBRL. 2.4.3

Implantation Phase

This phase aims at implanting an SOA solution. This phase contains the activity that implant an SOA solution, which is responsible for putting in operation the services developed in the previous phase. If the first initiative of an SOA implementation does not turn out to be effective, the company must perform a detailed analysis of the reasons that make the initiative unsuccessful, so that the committed errors or risks, which occurred during the implantation attempt, may be duly corrected or eliminated. Later, when the organization becomes more familiarized with and confident about the new concept (SOA), new attempts may be performed. After the implantation success, the organization may advance towards the implantation in other systems. However, until the end of an SOA implantation, the legacy systems and SOA applications will exist in a concomitant way. During an SOA adoption process, the governance polices must be totally implanted, if they do not exist. With the organization advance and maturation, in what concerns the use of SOA, one expects that the new projects will become faster, cheaper and with fewer

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implantation problems, because, the higher the level of reuse, the lower the effort for development will be and problems are likely to occur. When all the systems are service oriented, the organization must have a stabilized scenario and all the services must be in the companyÂ´s services repository and the presence of duplicated services inexistent. In this context, it is important that any new service follows the development process and the organizational policies directed to SOA. The usage of services, made available by the company, must also be made through the services repository and with a formal contract of services rendering (Waldman, 2009). 2.4.4

Final Considerations Regarding the Model

The model proposed in this work uses information technology governance good practices accepted by the market and the academia, besides new technologies for develping financial reports and information systems. Figure 3.8 shows the relation between IT processes (structured and defined through good COBIT and ITIL practices), SOA applications (developed through Web Services and XBRL) and the Business Processes (structured and maintained through BPM good practices) for the accomplishment of entrepreneurial strategies.

Figure 3.8. Relation among the IT processes, the SOA applications and the Business processes. BPM helps defining, structuring and managing the business processes present in the organization. COBIT and ITIL, together, structure and improve IT processes that support the information systems (SOA applications), which automatize the company business processes, in order to achieve its strategy. The change management IT process is an example of support given by IT processes to SOA applications. Once it is structured and defined, through COBIT and ITIL practices, the change management process must support SOA applications, in what regards the changes and modifications in legal requirements imposed by laws and regulations by which the organizations abide. With the use of BPM good practices, the organization is able to manage with more efficiency the business processes, mitigating or eliminating risks related to the lack of these process mapping, which, in this case, may generate the decrease of advantages that will be obtained from an SOA implementation, due to the complexity of the business processes and the fact that they involve diverse departments in the organization. The COBIT that acts as an IT governance model and, thus, embodies SOA governance helps to intensify the control over the processes that support the development and provision of service oriented applications, as it is the case of processes of service level management, changes, configuration, acquisition and maintenance of systems. In this way, COBIT contributes tothe mitigation or elimination of the risks related to the lack of governance and support from the companyÂ´s top management(both described in the previous section). ITIL contributes to managing the service level, the services that will be used or offered by the organization, minimizing the risk of not accomplishing what was

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previously agreed (OGC, 2007). ITIL also provides a contribution, through changes and configuration management, to the services that are already in production, because, through this management, it is possible to establish a higher control over the changes that may occur in the services, avoiding, thus, risks and problems coming from nonauthorized changes and/or performed in some service that is being rendered (OGC, 2007). 3.

CONCLUSION

This paper presented an IT management model for financial reports issuance. The model is divided into 03 layers and provides the creation of a corporative and IT environment which is more adherent to laws and regulations and more favorable to financial reports generation. The business processes layer aims at planning, evaluating, optimizing and controlling the organization business processes, through the usage of BPM good practices. In the IT processes layer, the IT area governance is implemented, based on business priorities and IT risks, using COBIT and ITIL good practices. In this layer, techniques are used to select, analyze and implement an organization IT process. The business layer and the IT layer contribute to the creation of a corporative environment and to the IT area. COBIT, as an IT governance model, allows measuring, controlling, and evaluating all the IT processes that, in turn, supports the organization business processes, contributing to achieving the company strategy. ITIL, however, contributes, through its practices, to projecting and structuring projects in a suitable way, making them more efficient and controlled inside the organization. This way, one may observe the good effects that IT governance implementation brings to the organization. SOA and XBRL implementation layer deals with aspects related to risk identifications and control in the service oriented architecture implementation. In this context, the execution of this layer of the proposed model enables risk reduction and a controllable SOA implementation, through the usage of good practices, such as the ones from COBIT, ITIL and BPM, since these practices improve the SOA implementation control, security and risk reduction. In the SOA/XBRL layer, it is presented a model for implementing this architecture integrated with XBRL, through Web Services, enabling the provision of information systems that are more flexible, connectable and aligned to the business processes, besides improving the reliability and quality in financial reports issuace. The structured management model proposed presents the benefit of creating an IT and corporative environment which is more adherent to laws and regulations and more favorable to financial reports generation. This model also contributes to decreasing the needs for financial data format transformation and for decreasing the extraction costs due to XBRL usage. Error risksand, consequently, increase of financial information reliability are also reduced, since there is no need to perform big efforts to transform and extract data in a different format anymore. With the SOA usage, the model is able to provide information systems that are more flexible, interoperable and aligned to the business processes, providing more flexibility to the changes that occur in the organization business. With the intention of performing a comparison between correlate works and the IT management structured model proposed in this paper, it was performed an analysis

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between the works described in Section 03 and the proposed model, discussing the deficiencies and benefits identified in the works. Table 4.1 presents a comparison between these works. Table 4.1. Comparasion between the works and the IT management model. USE OF GOOD PRACTICES AND TECHNOLOGIES

WORKS

COBIT

ITIL

BPM

SOA

XBRL

IT Management Model

YES

(Biancolino & Critofoli, 2008)

YES

(Gluchowski & Pastwa, 2006)

YES

(Waldman, 2009)

YES

(Baldam, Valle, Pereira, Hilst, Abreu and Sobral, 2010)

YES

(Moreira, 2009)

YES

Through the comparison, it is possible to observe that only the IT management structure model proposal contemplates all the good practices of technology management described in this paper. This is important, because with the collaborative usage of these management practices and technologies treated in this paper, it becomes possible to solve the problems related to IT management and to financial reports issuance, in a context of continuous change in the laws and regulations that govern them. It becomes evident, through the analysis of Table 4.1, that it was not found, in the literature researched for this work development, a similar proposal, emphasizing, thus, the need to create an IT management model that would make the corporative and IT environment more favorable for financial reports issuance and more adherent to laws and regulations. REFERENCES Baldam, Roquemar de Lima; VALLE, Rogerio de Aragão Bastos do; PEREIRA, Humberto Rubens Maciel; HILST, Sérgio de Mattos; ABREU, Mauricio Pereira de; SOBRAL, Valmir Santos. (2010). Gerenciamento de Processos de Negócios BPM – Business Process Management. Erica. BPMN. (2006). Business Process Modeling Notation Specification. Needram. Disponível em: http://www.bpmi.org. Acessado em 20/05/2011. Erl, T. (2009). Service-Oriented Architecture (SOA): Concepts, Technology, and Design, Edited by Prentice Hall, 9ª Edition. Guerra, Márcia R. (2007). Governança de TI com COBIT. São Paulo: TIEXAMES. Disponível em: http://www.tiexames.com.br/ensino/home.php. Acessado em: 20/08/2008.

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Harrington, H. J.; Esseling, E.K.C.; Nimwegen, H. V. (1997). Business Process Improvement. New York: McGraw-Hill. ITGI. (2007a). COBIT 4.1. USA: IT Governance Institute. Disponível em: http://www.isaca.org/Template.cfm?Section=Downloads3&Template=/MembersOnly.c fm&ContentID=49581. Acessado em 20/08/2008. ITGI. (2007b). IT Governance Implementation Guide. USA: ITGI. Disponível em:http://www.isaca.org/Template.cfm?Section=Downloads3&Template=/MembersOn ly.cfm&ContentID=49582. Acessado em: 20/03/2009. ITGI. (2006). IT Control Objectives for Sarbanes-Oxley. USA: ITGI. Disponível em: http://www.cobitonline4.info/Pages/Public/Browse/PdfDownload.aspx. Acessado em: 20/03/2009. Josuttis, N. M. (2007). SOA in Practice: The Art of Distributed System Design (Theory in Practice), Edited by OReally Media. Kaplan, Robert S.. Norton, David P. (1997). A Estratégia em Ação. Rio de Janeiro: Campus. Leal, M.A.M. (2006). A Organização e Arquitetura de Processos na Telemar. In: segundo Seminário Brasileiro de Gestão de Processos, Rio de Janeiro. Volume único. CD-ROM. Marzullo, Fabio Perez. (2009). SOA na Prática Inovando o seu negócio por meio de soluções orientadas a serviço, Editado por Novatec. Moreira, José Rogério Poggio. (2009). Governança de ti: metodologia para integração do COBIT e ITIL em empresas que buscam conformidade com a lei Sarbanes-Oxley. UNIJORGE, Salvador. OGC. (2007). The Official Introduction to the ITIL Service Lifecycle. UK: TSO. Paim, R., Caulliraux, H., Cardoso, V. e Clemente, R. (2009). Gestão de Processos: pensar, agir e aprender. Bookman. PMI. (2008). Um Guia do Conhecimento em Gerenciamento de Projetos (Guia PMBOK). Pensilvania, EUA: PMI. Silva, P. C. (2003). Explorando linguagens de marcação para representação de relatórios financeiros. Dissertação de Mestrado. UNIFACS, Salvador. Silva, P. C., Teixeira, C. C. (2003) A Gestão da Informação Financeira do Banco Central do Brasil Apoiada por XBRL In: I Workshop de Tecnologia da Informação e gerência do Conhecimento, 2003, Fortaleza. Silva, P. C., Teixeira, C. C. (2002) Informações Financeiras como Hiperdocumentos na Web In: VIII Brazilian Symposium on Multimedia and Hypermedia Systems SBMIDIA 2002, 2002, Fortaleza. SBC, p.356 – 364. Siqueira, L. G. P. (2006). Modelo de Governo de Processos da Área Internacional da Petrobras. In: Segundo Seminário Brasileiro de Gestão de Processos, Rio de Janeiro, Anais. Volume único. CD-ROM. Waldman, Daniel. (2009). Cenários e Etapas para Implantação SOA. Disponível em: <http://www.aqueleblogdesoa.com.br/2009/05/cenarios-e-etapas-para-implantacaosoa/>. Acessado em: 18/12/2010.

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OASIS. UDDI. (2004). Disponível em: http://uddi.org/pubs/uddi-v3.0.2-20041019.pdf. Acessado em 20/12/2011. Shuja, Ahmad K; Krebs, Jochen. (2008). Unified Process Reference and Certification Guide. IBM Press. W3C. HTTP. (2009). Disponível em: http://www.w3.org/standards/techs/http#w3c_all. Acessado em 20/12/2011. W3C. SOAP. (2007a). Disponível em: http://www.w3.org/standards/techs/soap#w3c_all. Acessado em 20/12/2011. W3C. WSDL. (2007b). Disponível em: http://www.w3.org/standards/techs/wsdl#w3c_all. Acessado em 20/12/2011. W3C. XML. (2008). Disponível em: http://www.w3.org/standards/techs/xml#w3c_all. Acessado em 20/12/2011.

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JISTEM - Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol. 10, No. 3, Sept/Dec., 2013 pp.621-642 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752013000300009

IMPACTS OF A RELATIONSHIP MODEL ON INFORMATIONAL TECHNOLOGY GOVERNANCE: AN ANALYSIS OF MANAGERIAL PERCEPTIONS IN BRAZIL Adriano Weber Scheeren Joaquim Rubens Fontes-Filho Getulio Vargas Foundation, Rio de Janeiro/RJ, Brazil Elaine Tavares Coppead, Federal University of Rio de Janeiro, Rio de Janeiro/RJ, Brazil __________________________________________________________________________

ABSTRACT The aim of this article is to analyze the impacts, based on the perceptions of managers, of the deployment of a model to govern the relationship between business areas and IT in a large Brazilian financial organization. To undertake the case study of this deployment, the research firstly performed documental analyses of the process and then sent electronic surveys to a sample of managers in order to evaluate their perceptions of the model’s impact in terms of the formalism of the organization’s internal processes, strategic alignment between business areas and IT and levels of governance in the organization. The results revealed that managers perceived improvements in the quality of technological solutions, levels of IT governance, the understanding of IT area needs and business area demands, but they also stated that the negotiating process was more complex and there was no increase in their level of satisfaction with IT. These results of the study may contribute to the development of instruments for the evaluation of the impacts of the deployment of relationship models on important organizational aspects. Keywords: Information Technology; IT Governance; IT Alignment; Relationship Model; IT Strategy _____________________________________________________________________________________ Manuscript first received/Recebido em 19/01/2012 Manuscript accepted/Aprovado em: 09/05/2013 Address for correspondence / Endereço para correspondência Adriano Weber Scheeren, Getulio Vargas Foundation Brazilian School of Public and Business Administration (FGV/EBAPE) Praia de Botafogo, 190 - room 502 - Rio de Janeiro (RJ) - CEP 22250-900 Tel: 55-21-37995753 Email: adrianows@gmail.com Master’s Degree in Management from the FGV/EBAPE, with a Bachelor’s Degree in Informatics from the Federal University of Santa Maria (UFSM – RS). Researcher in the Corporate and Organizational Strategy and Governance Studies Group (NEEG) at the FGV/EBAPE. He works in a financial institution controlled by the Federal Government in the technology division that manages its relationship with the organization’s business areas. Joaquim Rubens Fontes-Filho, Getulio Vargas Foundation Brazilian School of Public and Business Administration (FGV/EBAPE) Praia de Botafogo, 190 - room 502 - Rio de Janeiro (RJ) - CEP 22250-900 Tel: 55-21-37995753 Email: joaquim.rubens@fgv.br Professor at the FGV/EBAPE, Ph.D in Administration from the FGV/EBAPE, Master’s Degree in Public Administration (FGV/EBAPE) and in Production Engineering (UFRJ/COPPE), Bachelor’s Degree in Production Engineering (UFRJ), and coordinator of research projects funded by the CNPq and of the Corporate and Organizational Strategy and Governance Group (NEEG) at the FGV/EBAPE. Elaine Tavares, Coppead Graduate School of Business Federal University of Rio de Janeiro Rua Pascoal Lemme, 355 - Ilha do Fundão 21941-918 - Rio de Janeiro – RJ Tel: 55-21-25989859 Professor at Coppead/UFRJ. PostDoctoral Degree at CERGAM - Centre d'Etudes et de Recherche en Gestion da Université Aix- Marseille III, France. Ph.D in Administration from the Brazilian School of Public and Business Administration of the Getulio Vargas Foundation (FGV/EBAPE). Master’s Degree in Business Administration from the FGV/EBAPE. Bachelor’s Degree in Industrial Design from the Pontifical Catholic University of Rio de Janeiro. She has 15 years of professional work experience in large companies, mainly in the financial and educational areas. Email: elaine.tavares@coppead.ufrj.br Published by/ Publicado por: TECSI FEA USP – 2013 All rights reserved.

622 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

1. INTRODUCTION The Information Technology (IT) area is becoming increasingly important in organizations, whether as a main activity or a facilitator of a firm’s business and to make business processes more agile. In the banking sector specifically, the reconfiguring of IT from mere back-office functions to its current position as a fundamental element of electronic banking reflects this growing importance. According to the 2010 figures from the Brazilian Bank Federation (Federação Brasileira de Bancos [Febraban], 2011), the main relationship channel with bank customers was self-service, which accounted for 32% of the 55.7 billion bank transactions performed followed by Internet-based transactions with a 23% share, with 27.8 million mainly individual customers using internet banking. According to this entity the banking sector’s TIrelated investments and expenditures totaled more than 22 million BRLs in 2010, representing a 15% increase over the previous year, thus revealing a solid growth in total IT and communication expenditure (Febraban, 2011). This importance, shown by the fact that the banking industry is one of the biggest investors in IT worldwide and Brazil’s largest consumer of IT products and services (Faria & Maçada, 2011), makes it crucial to perfect processes in order to align IT efforts with the strategic importance represented by each initiative in business terms, establishing the criteria governing competition between business areas according to the prioritization of IT activities. Determining which demands should take priority constitutes an important challenge for IT and business areas, either because initiatives with a greater potential return may be difficult to implement (Graeml, 2000) or due to the intangible nature of the services or innovations produced. The findings of an international survey showed that the 548 executives who were consulted considered that there was still a significant gap between corporate IT area expectations and performance, and professionals of this area were recommended to improve their knowledge of business demands (Roberts & Sikes, 2008). In Brazil, Rodrigues, Maccari and Simões (2009) found a similar gap in a survey that focused on IT executives of the country’s 100 largest firms. Thus, IT governance can be used to foster the alignment between Information Systems (ISs) and business strategy, in addition to improving the performance and contribution of these systems to operational performance (Dameri & Perego, 2010). IT governance appeared during the 1990s and rapidly became an important instrument for promoting this alignment and the integration of organizational activities with IT (De Haes & Grembergen, 2004). Although organizations, when deploying a model to govern the relationship between business areas and IT, focus initially on improving the strategic alignment between these areas, they also aim at achieving improvements in IT area processes. When business areas and the IT area work in a collaborative fashion to improve IT processes, the value added to the business tends to be proportionately greater (Graeml, 2000). 1.1

Research problem and objectives

The aim of this article is to analyze the benefits and limitations resulting from the deployment of a model to govern the relationship between business areas and the IT area, characterized as an IT governance mechanism, based on the perception of holders

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of management positions. The term “relationship model” is used in the sense of a systematic approach aimed at developing norms for governing the relationship between the cited internal areas of organizations and this systematic approach can be reproduced as long as certain conditions are present. The methodology was based on a case study of a large Brazilian financial firm which observed and analyzed the perception of managers before and after the introduction of the relationship model, regarding the extent to which its implementation facilitated the alignment between IT project priorities and organizational strategy. Before 2004, negotiations to prioritize IT initiatives in this firm occurred directly between business area customers and the internal areas of the IT division. No attempt was made to align the priorities to be given to these initiatives with the business strategies and investments as a whole or align them inside each business area. This situation led to constant interruptions in the development of technology demands due to the need to cater urgently to a demand that was considered to have a higher priority. Seeking to improve its governance structures in this area the organization has developed and deployed, as of 2005, a model to govern the relationship between business areas and the IT area. This model attributes the responsibility for prioritizing demands directed to the IT area to the business area itself which bases its decisions on the corporation’s strategy. The model is operationalized through periodic meetings between executive managers of the firm’s business and IT areas, in which the prioritization of demands is aligned between areas. The first section of this article, which consists of a bibliographical review, discusses the need for strategic alignment between business and IT areas, the contribution of IT governance, the relationship between these areas and the degree of formalism involved. The following section presents the method used, the relationship model analysed in the case study and the research hypotheses. The article proceeds with a section analyzing the study’s findings followed by the last section containing some final considerations. 2. THEORETICAL REFERENCES 2.1 Relationship between business areas and IT The significant impact that IT investments and their decision-making processes have on an organization’s success (Dean & Sharfman, 1996; Devaraj & Kohli, 2003) and the difficulties encountered in aligning the expectation of business area and IT managers (Roberts & Sikes, 2008), make it fundamental to understand how organizations govern their investment decisions in this sphere (Xue et al., 2008). Given the strategic importance of this type of decision and the financial resources involved, firms have to refine their IT initiative selection mechanisms and various management tools have been used to involve and create awareness among business executives regarding IT-related decisions (Lunardi & Dolci, 2009). The IT investment decision process consists of a sequence of actions that begins with the identification of a problem associated with systems, thus opening up an opportunity and culminating with the approval of an IT project (Boonstra, 2003). An IT investment prioritization mechanism should be based on the return of projects and assets for the organization and in their alignment with business objectives (Fernandes & Abreu, 2006).

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Given that a variety of organizational actors influences the decision-making process, it is not enough to consider only final deciders, as this could generate a reductionist view of the IT investment decision process (Xue et al., 2008). All the main parties involved should be considered as part of the decision process – all the way from the pre-deciders, who make the IT investment proposals, to final deciders. Prahalad (2006) defends the potential of Chief Information Officers (CIOs) as facilitators of the implementation of business strategies through the use of IT operational excellence processes. Their functions are to assure the transformation of business through IT’s aligned strategies. It is important to highlight that these deciders may face limitations in their choices as in the case of regulated sectors. Facó, Diniz and Csillag (2009) observe that the definition of a firm’s competitive priorities is a function of the market and the operational resources available, which include information technology. In the case of banking, which is one of the economy’s most regulated sectors, it is also necessary to consider the delimitations imposed by the regulatory framework on activities and strategic choices, with impacts on both decisions regarding operational resources and the actual appointment of deciders given that, as observed by Andrade (2005), in the case of Brazil, Central Bank authorization is necessary for appointments to the bank’s statutory bodies. IT’s effectiveness depends on the way it is organized and conducted within the parameters of a business. These are precisely the middle-level functions that link the operational base to the strategic top management. To achieve this, Lutchen (2003) advocates six critical steps: (1) CIOs should understand the firm’s business and align IT with the fundamentals of this business; (2) CIOs should administer IT as a distinct business which supports corporate objectives and sustains its profits; (3) CIOs should link IT strategy to the strategy of the business in a pragmatic way, adjusting their processes with quality and efficiency; (4) CIOs should help business units to define their needs (and risks), improving their services through controlled and efficient management; (5) CIOs should consolidate a high quality, result-oriented customer service culture in IT; and (6) CIOs should be compensated based on the contribution of their IT initiatives to the firm’s profitability. Executives should recognize the IT’s status as a primary factor of production and make it a top management responsibility, instead of isolating it as a technical segment, distant from leadership (Raghupathi, 2007). There should be an effective exchange of ideas in firms and a clear understanding of the initiatives needed to ensure the success of corporate strategies, with a view to aligning IT investments with these strategies (Lunardi & Dolci, 2009). Fernandes and Abreu (2006) define strategic alignment between businesses and IT as a process that transforms a firm’s business strategy into IT strategies and actions that seek to ensure that business objectives will be supported. As IT is able to enhance business strategies that could not be implemented without its help, this strategic alignment is bidirectional, i.e., from business strategy to IT strategy and vice-versa. Lunardi and Dolci (2009) identified the following advantages of the IT area’s involvement with other areas: (i) prioritization of IT projects according to business strategy, (ii) enhanced perception of IT’s value, (iii) participation of IT in the formulation of the firm’s strategy, (iv) visibility and transparency of the IT area and (v) planning of IT initiatives according to the firm’s strategy. The authors affirm that the use of various mechanisms to support the prioritization of IT projects that are most

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aligned with the firm’s strategy increases the other areas of the perception of the IT area’s value.

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organization’s

Corroborating this view, Graeml (2000) affirms that IT’s alignment with the firm’s business is enhanced when IT assumes a strategic support role aimed at achieving organizational objectives. Based on the CMM (Capability Maturity Model), the author describes the partnership between the business and IT areas as being a function of the alignment existing between the former areas and the role of the organization’s IT area. This alignment may be in a phase in which it is still conducted by the business area or in the phase in which the IT area initiates the creation of opportunities for these business areas. This alignment can also be well established with strong ties existing between these areas. In terms of the IT area’s role in the organization, it may either act as a mere receiver of requests, as an area that provides consultancy services for business areas or as an area that collaborates with other areas of the organization. According to this same author (Graeml, 2000), the degree of partnership that exists between business areas and the IT area can be classified as “non-existent”, “increasing” or “established”. In Brazil, there seems to be an alignment between IT and basic business processes, despite the evidence of a lack of synchronization. Rodrigues et al. (2009) studied the design of IT management in the largest 100 Brazilian firms and observed that 63% of them have formal IT plans aligned with their business plan, although only 30% update these plans. However, 37% of IT executives did not perform this alignment or did not recognize its importance and only 14% bothered to continuously update alignment indicators. 2.2

Strategic alignment and IT governance

The growing importance of IT for firms makes it essential to perfect control mechanisms (Weill & Ross, 2006). Muhanna and Stoel (2010) observe that, in general, investors attribute a higher market capitalization to firms with a greater IT capacity, based on the view that this area contributes to improving an organization’s future prospects in terms of size and risk associated with future returns. The dynamic synchronization of business strategies and IT is not sufficient to guarantee IT’s effective in terms of its contribution to the business (Shpilberg, Berez, Puryear, & Shah, 2007), given the possibility that alignment problems may occur. The authors warn about the possibility of inefficiency associated with the IT group’s competencies, in a situation where the IT group understands business objective priorities but is unable to respond effectively with adequate technologies or solutions, thus producing an alignment trap. They suggest that attention should be paid to three determining factors of IT’s effectiveness for business: emphasis on simplicity, correct and efficient outsourcing and adequate attribution of responsibilities. Laartz, Monnoyer and Scherdin (2003) sustain that if there is overall inefficiency in project execution (in terms of time and budget), there may be ineffectiveness in IT’s alignment with specific and important business objectives. Even so, IT can still be aligned. Thus, competencies may need to be examined and not necessarily the alignment strategy in use (Rodrigues Maccari & Simões, 2009). In addition, one should be aware that various structures, processes and mechanisms related to IT effectiveness may function in a specific organization but not in others (De Haes & Van Grembergen, 2004; Dameri & Perego, 2010). These alignment problems are taken into account in the sphere of IT governance, a concept that became a widely used yardstick during the 1990s when Henderson, Venkatraman and Loh used the term to describe the complex process of aligning IT

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with the business (Loh & Venkatraman, 1993; Henderson & Venkatraman, 1993). IT governance contributes to a better alignment between ISs and business strategies in order to improve IS performance and results and reduce IT risk. It thus has a dual objective: to contribute to organizational performance and involve ISs more closely in the future challenges of the business (Dameri & Perego, 2010). The IT Governance Institute (Information Technology Governance Institute [ITGI], 2009) affirms that IT governance consists of organizational and leadership structures, as well as processes, that ensure that a firm’s IT area maintains and extends an organization’s objectives and strategies. Weill and Ross (2006) define IT governance as the specification of decision rights and framework of responsibilities in order to encourage desirable behavior in IT use. Fernandes and Abreu (2006) call attention to the fact that IT governance seeks to encourage the sharing of IT decisions with other areas of an organization and is not restricted merely to the implementation of “best practices”. Rau (2004), understanding governance to be the way in which an organization defines, monitors and achieves its strategies, considers that its application to the IT area assumes that its effectiveness is associated with the ability of technology investments to ensure that business objectives will be attained in an effective and efficient manner. It is difficult to find a single definition for IT governance, but it usually encompasses: alignment between information systems and business strategy, strategic decisions regarding investments in IT and IS and the generation of value through the use of IS in business (Dameri & Privitera, 2009; Luftman, 1996; Van Grembergen, De Haes, & Guldentops, 2004; Weill & Ross, 2006). IT governance depends on multiple contingencies (Sambamurthy & Zmud, 1999): corporate governance model, corporate strategy, organization of the business, distribution of authority, etc. Xue et al. (2008) identified IT governance archetypes which varied according to the characteristics of IT investments in relation to the external and internal environments. Thus, one can perceive that it is important for IT governance mechanisms to be adequate for the firm in which they are being deployed, in order to fit in with the organization’s other management mechanisms. Organizations should develop their own IT governance policies and procedures and disseminate them for implementation (Nolan & McFarlan, 2005; Raghupathi, 2007). Moreover, in order to deploy an effective IT governance system it is necessary to harmonize current functionalities with an orientation towards the future in IT investment decisions (Weill, 2004). IT governance exists in all organizations that use IT given that, conceptually and despite its polysemic nature, governance “is about steering and the rules of the game” (Kjaer, 2004, p. 7), so that, independently of quality and its standards, it can be found in organized systems as the act or way of governing. However, the organizational quality and practices of IT governance varies among firms, depending on aspects such as whether rights and responsibilities are well distributed among appropriate people, whether formalized processes for important tasks are in place or whether there is adequate documentation (Simonsson, Johnson, & Ekstedt, 2010). Thus, many firms are refining IT governance mechanisms in order to direct their expenditures in this area as a strategic priority. These firms initiated the deployment of IT governance so as to obtain alignment between business areas and the IT area, with the aim of generating value for the business (Fernandes & Abreu, 2006). Alignment is defined here as the degree of commitment of the IT group to the priorities of the

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business, the allocation of resources and realization of projects and delivery of solutions that are consistent with the objectives of the business (Shpilberg et al., 2007). This alignment can be achieved by understanding that IT governance is part of corporate governance and by adjusting a model of IT governance according to best practices observed in the market (De Haes & Van Grembergen, 2004). Thus, IT governance is the responsibility of the management team as an integral part of corporate governance. Governance reflects the leadership, organizational structure and the processes that ensure that IT supports and enhances the organization’s strategies and objectives (Raghupathi, 2007). 2.3

Advanced relationship: process formalism

The evolution of IT’s role in organizations – from providing technology to establishing a strategic partnership with business areas - has led this area to seek fresh ways of fulfilling its new role in organizations. In recent years, the duration of the business cycle and firms’ technology cycle have both been reduced. However, this reduction in the time taken by the IT area to cater to business area demands has not been sufficient to correspond to the expectations and needs of other areas of the organization adequately. Thus, the perception is that the IT area is always late in terms of fulfilling business area demands (Graeml, 2000; Tavares & Thiry-Cherques, 2011). According to Rodrigues et al. (2009), IT in Brazilian firms meets basic demands but is not equipped to use the best automated practices, acting much more according to a solution supplier logic than as a promoter of innovation. However, it is possible to observe a quest for new ways of achieving greater maturity in the governance mechanisms of its internal processes (Gartner, 2009). Through these improvements in IT processes, organizations are seeking, in conjunction with the other components of IT governance – organizational mechanisms and structures – to attain higher levels of efficiency in the IT area, achieve its strategic objectives and strengthen its role as strategic partner of business areas. Organizations have increased the degree of formalism in the relationship between the business and IT areas especially in terms of the presentation of demands. The IT area has also increased its use of frameworks and market models (CMM, CMMI, MPS-Br, PMBoK, CobIT), in order to improve its internal processes and its quality, productivity, efficiency and communication with business areas, as well as also explore possibilities for innovation. Rodrigues et al. (2009), when researching Brazilian organizations, found that management is oriented towards systems (ITIL, COBIT) that do not optimize business processes. It is important to emphasize that models such as COBIT (Control Objectives for Information and related Technology): (i) are generic models, designed for a hypothetical firm; (ii) concentrate on SI audits; (iii) are instruments of control and not governance directives; (iv) are not adequate for aligning IS with strategy and to create value for the business based on ISs (Dameri & Perego, 2010). Research undertaken in various countries by Deloitte Touche Tohmatsu (2009) into the balance between IT and business areas identified that firms are increasingly institutionalizing the relation between these areas and seeking the ideal point in this relationship. According to this study, this kind of formalized and structured management mechanism enables the IT area to listen to the needs of the business areas, thus constituting a good way of starting to align the organizations IT and business areas.

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Khatri and Brown (2010) affirm that to design a governance structure it is necessary to identify fundamental decisions that need to be taken and those responsible for them. The authors show how structured and unstructured mechanisms can be used to deploy a governance structure. For example, a committee of business leaders can review and approve IT projects. Web portals can be used to disseminate procedures and policies. Compensation systems can be employed to reinforce the value the firm attaches to information assets. 3. METHODOLOGY In order to identify benefits and limitations of the deployment of models to govern the relationship between business areas and the IT area, the research performed a case study of a large Brazilian financial firm in order to evaluate its managers’ perceptions of the model. Data collection was based on documental analyses of the development and deployment of the model and the results of a questionnaire whose construction was based on hypotheses derived from the theoretical references and distributed electronically to a sample of managers. 3.1. Definition of Research Hypotheses The possible impacts of the deployment of this model governing the relationship between business areas and the IT area were divided into three categories of analysis, as shown below: 1. Formalism in the Organization’s Internal Processes – this category evaluated the model’s impacts on aspects related to the organization’s internal processes. It is supposed that these impacts derive from the need to increase the degree of internal formalism in the execution of the organization’s internal processes in order to support negotiations and enable them to be effective. 2. Strategic Alignment between Business Areas and IT– in this category the results of the relationship model were evaluated in terms of impacts on the strategic alignment between the firm’s business areas and the IT area. One may suppose that by fostering the alignment of IT initiatives with strategic directives, one of the consequences of the relationship model is to increase the perception of strategic alignment between these areas. 3. Levels of Governance in the Organization – in this category the research evaluated the perceptions of the relationship model’s impacts on the organization’s levels of governance. One may suppose that a relationship model that generated perceptions regarding both the formalism of the organization’s internal processes and strategic alignment between the firm’s business areas and its IT area should also be perceived as having had effects on the organization´s levels of governance. Based on the categories of analysis presented the research defined the following hypotheses:

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Hypothesis: In an organization with a relationship model instituted between No. business areas and the IT area, Reasons/Consequences

1.a

1.b

2.a

2.b

2.c

managers identify improvements in the The need for greater formalization in quality of IT solutions developed. internal processes resulting from the adoption of a model of this kind managers of the business areas identify an should lead to the creation of more increase in the level of satisfaction of detailed and consequently better business area expectations on the part of the understood demands (on the part of IT area. business areas), as well as generating improvements in these areas’ internal processes. One may suppose that some of the consequences of the managers of the IT area identify a greater deployment of a relationship model of clarity in the demands passed on by the this kind would include an increase in business areas to the IT area. the perception of the quality of technological solutions developed an improvement in the organization’s internal processes. managers identify an increase in the level of strategic alignment between areas.

As one of the objectives of the managers of business areas know and deployment of a model for governing understand the strategies and needs of the IT the relationship between an area. organization’s business and IT areas is managers of the IT area know and to ensure that prioritized demands are understand the strategies and needs of the the ones most aligned with the firm’s corporate strategies, one may suppose business areas. that managers will perceive an managers perceive IT as a strategic partner increase in the level of this alignment. of the business areas and not as a mere technology provider.

levels of IT governance and corporate governance are perceived by managers as being greater than without the use by the organization of this kind of model.

3.a

managers of business areas understand that the organization’s level of corporate governance are greater and that the risks represented to the organization by the IT area are known.

3.b

managers of the IT area understand that the organization’s levels of IT governance are enhanced and that the risks represented to the organization’s business by the IT area are known.

As a relationship model of this kind can be understood as an instrument of IT governance that can have an effect outside the organization, one may suppose that managerial perceptions in this regard will be enhanced.

Table 1 – Research Hypotheses

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630 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

3.2. Data Collection and Analysis The research universe was composed of managers of the organization which constituted the object of the case study who worked in the areas that managed its business and technology. The research selected divisions and business units responsible for at least four technology solutions and, in the case of the technology division, all the areas responsible for the construction of technological solutions, both applications and infrastructure. 705 managers were selected from a universe of 1.000. They were each sent a questionnaire and 161 replies were received (22.84% of the total). In addition, documental research was conducted in the organization. The latter’s aim was to describe and clarify the model used to govern the relationship between business areas and the IT area. The field research tool – an electronic questionnaire sent – was divided into the following sections: Section Objetive

Operationalization

Selection of aspects such as number of To obtain information about the years at the company and area, position, respondent. participation in relationship model meetings and knowledge of results.

Perform a general evaluation of the adequateness of the situation prior to the deployment of the model governing the relationship between IT areas and business areas.

Selection of the reasons given for their evaluation of the situation regarding the negotiation of IT demands in the organization before the relationship model.

Provide data to evaluate hypotheses related to the analytical category Each of these sections was composed of “Formalism in the Organization’s 10 items for evaluation. The latter were evaluated once relating to the period Internal Processes”. before and once after the deployment of Provide data to evaluate hypotheses the model, with the difference between related to the analytical category these periods being a consequence of this “Strategic Alignment between deployment. Each of the evaluations was Business Areas and IT”. performed using a Likert type scale of 5 Provide data to evaluate hypotheses items, in which respondents selected total related to the analytical category inadequateness at one extreme and total “Levels of Governance in the adequateness at the other. Organization” Perform a general evaluation of the adequateness of the situation after the deployment of the model governing the relationship between IT areas and business areas.

Selection of the reasons given for their evaluation of the situation regarding the negotiation of IT demands in the organization after the relationship model.

Table 2 – Sections of the Research Tool (Questionnaire)

Sections 1, 2 and 6 of the questionnaire received a descriptive statistical treatment, aimed at (i) detailing the sample’s profile, (ii) establish the level of adequateness of the demand negotiation process which existed prior to the deployment of the model under

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evaluation and their main reasons and (iii) establish the level of adequateness of the situation regarding the negotiation of demands after the deployment of the relationship model and their main reasons. In the case of the remaining sections (3, 4 and 5), the research used two forms of evaluation for the research hypotheses: (i) a factorial analysis followed by an analysis of the difference between the averages of the groups formed by the situation before and the situation after the deployment of the model, and (ii) selection of significant variables undertaken by the authors according to face validity followed by an analysis of the difference between the averages of these groups. 4. PRESENTATION AND ANALYSIS OF THE RESULTS 5. 4.1

Relationship Model

The creation of a model to govern the relationship between business areas and the IT area sought to organize the requests and prioritization of IT demands in the firm. Before 2004 both the negotiation and prioritization of IT initiatives were based on direct negotiations between business areas customers and the internal areas of the technology division that were responsible for the application that automated the solution. This form of negotiation and prioritization hindered the alignment of the priorities of these initiatives with the organization’s corporate and investment strategies and even alignment with the internal priorities of each business area. The effect of this situation on the IT area could be seen in the constant interruptions in the development of a specific technology demand owing to the need to urgently prioritize a demand that had been identified as having a higher priority than those currently being catered to. As a result of this direct negotiation between business areas and the area responsible for the solution in the IT area, there was little formalism in the definition of demands, which would involve the simplification of specifications for the implementation of requests, given that those in charge of both the business area and the IT area had a thorough knowledge of the technological solution. In order to organize the negotiation of IT-related demands between its internal areas, the firm developed a model to govern the relationships between the organization’s business management areas and the IT area, which was deployed in 2005. The first step in the creation of this new model as to assign a business manager to each of the organization’s ISs. Thus, all new needs or those that represent changes in systems are analyzed by the area that is responsible for specific business in the firm. The needs are then evaluated according to their degree of alignment with the organization’s strategies and listed in order of priority. This list of demands is then forwarded to the IT area which assesses how each need can be met and the number of hours necessary to fulfill the demand. After the IT area has performed its evaluation a final, monthly, prioritization meeting is organized joining all executive managers of the business area and the technology division. With the information regarding how each demand will be met and respective schedules now at hand, the business area maintains or alters the order of priority of its demands. The demand priorities negotiated during previous meetings can be changed due to the appearance of more urgent demands or the need to comply with a new law or norm. At these meetings participants also report the progress of demands prioritized in previous prioritization meetings.

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632 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

4.2

Sample profile and descriptive analysis

The distribution of managers who replied to the 161 questionnaires according to their position in the organization is presented in Table 3. 24 managers of the business areas and one from the IT area stated that they did not have the knowledge or information necessary to evaluate the model and were removed from the sample, thus leaving only 136 valid questionnaires. In proportional terms, more IT area employees participated than those from the organization’s business areas, or 33.17% and 13.72% respectively.

Area

Position General Manager

Business Area

No.

20.00%

0.00%

Executive Manager

105

15.24%

7.62%

Division Manager

392

19.39%

0.00%

503

18.49%

0.00%

Executive Manager

30.00%

3 30.00%

Division Manager

37.50%

18 37.50%

Team Manager

142

33.10%

46 32.39%

Area Total

202

33.66%

67 33.17%

14.29%

0.00%

115

16.52%

9.57%

Area Total General Manager

General Manager Executive Manager Area Total

No.

Valid Quest.

Team Manager

IT Area

Quest. Replied

Quest. Sent

61 15.56% 0

0.00%

69 13.72% 0

0.00%

Division Manager

440

21.36%

17.95% 79 %%%% %

Team Manager

143

32.87%

Overall Total

705

161

22.84%

3.17%

136 19.29%

Table 3 – Questionnaire Respondents

The descriptive data revealed the seniority of respondents: 94% of managers had worked at the company for more than 15 years and 40% for more than 25 years. It could be supposed that these executives’ level of knowledge of the organization was correspondingly high. More than 70% of respondents affirmed that they took part or had already taken part in the relationship model’s negotiation meetings, showing that they were familiar with the negotiation process. As regards respondents’ level of knowledge of the results of the meetings, the research found that that slightly less than 70% of survey respondents knew about what was negotiated in the negotiation meetings. This percentage is more than 10 percentage points greater in the group of IT area managers (74.63%) than in the group of business area managers (63.77%). This

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difference is possibly due to the fact that for the IT area the demands negotiated at these meetings constitute direct inputs for the planning of activities, whereas in the business areas monitoring is attributed to only some of the managers. Table 4 presents the distribution of replies according to company area to the question that sought to evaluate the perception of respondents regarding the adequateness of the process involving the negotiation of demands between the business areas and the IT area, according to pre-defined reasons, before the implementation of the new relationship model, thus prior to 2004. Most managers considered that the previous situation was inadequate, mainly because strategic aspects of the requests were not considered and due to the lack of process formalism.

No.

No reply

Inadequate

Adequate

Total

106

Reason

No.

Perc. of/ No.Repl

3.68% Because direct negotiation between parties perhaps would not consider aspects such as the strategic importance of requests.

82.08%

Because agility in the implementation of requests may cause system unavailability.

13.21%

Because the lack of formalism may hamper the understanding of the request, which could cause problems in systems.

69.81%

Because the negotiation occurred directly between the business area and the person responsible for the application in the IT area without intermediations.

76.00%

Because the agility one had to implement requests in the systems offset the problems 18.38% resulting from lack of formalism.

68.00%

Because the specifications for implementation of requests were simpler, given that responsible parties in both the business and IT areas had a deep understanding of the matter.

68.00%

77.94%

136 100.00% Table 4 â&#x20AC;&#x201C; Evaluation of the Situation Before the Relationship Model

Obs.: * More than one reply was permitted After the deployment of the model the research found a significant difference regarding the perception of the modelâ&#x20AC;&#x2122;s adequateness, with the managers of the IT area recording the perception of a higher level of adequateness. Table 5 presents the reasons selected by respondents to evaluate the modelâ&#x20AC;&#x2122;s adequateness or inadequateness. The main reason given for justifying the inadequateness of the new model, given by 45 of the 71 managers who considered the model to be inadequate, or 63.38% of this group,

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634 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

related to the fact that demands were prioritized by the business area responsible for managing the IT solution, thus enabling their interests to take precedence over the need for alignment with the organization’s strategy. On the other hand, among the reasons given for justifying the perception of adequateness, one should highlight the attribution to business areas of the responsibility for prioritizing demands for applications under their responsibility. Reply

No.

No Reply

Inadequate

Adequate

Total

136

Reason

Perc. of/ No.Repl

2.21% Because it added complexity to the process by obliging business areas to first of all negotiate with the solution management area.

39.44%

Because it permitted new prioritizations on very short notice, perhaps causing the suspension of activities.

28.17%

52.21% Because it did not permit the prioritization of demands that were more aligned with the organization’s strategy, privileging instead the demands of the business area that manages the solution.

63.38%

Because it permits prioritizations outside the negotiating process, then reducing the transparency of the process.

43.66%

Because it stipulates business areas that are responsible for the prioritization of demands for applications under their responsibility.

82.26%

Because it permits the reformulation of prioritizations at relatively brief intervals, which is fundamental for the dynamism of a firm in the financial area.

58.06%

45.59% Because it permits the prioritization of demands that are more aligned with the company’s strategy, which can be demonstrated by the good results obtained by the organization.

62.90%

Because, in exceptional cases, it allows the negotiation to take place outside the negotiating agenda in order to make the process more agile.

54.84%

100.00%

Table 5 – Evaluation of the Situation After the Relationship Model

Obs.: * More than one reply was permitted

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Table 6 shows a comparative evaluation of the adequateness of the negotiation process before and after the deployment of the relationship model, revealing a significant improvement in perceptions of adequateness on the part of IT area managers. However, this was not observed in the case of business area managers: Before the Model Area

Reply No reply

Business Area

7.25%

2.90%

Inadequate

57.97%

59.42%

Adequate

34.78%

37.68%

Total Business Area

100.00%

0.00%

1.49%

Inadequate

98.51%

44.78%

Adequate

1.49%

53.73%

100.00%

3.68%

2.20%

106

77.94%

52.21%

18.38%

45.59%

136

100.00%

136

100.00%

Total IT Area No reply Area Total

Perc. of/Area

No.

No reply IT Area

Perc. of/Area

No.

After the Model

Inadequate Adequate Overall Area Total

Table 6 – Comparative Evaluation of Situations Before and After the Model

4.3

Verfication of the research hypotheses

The evaluation of the research hypotheses was performed using distinct methods. In the case of hypotheses 1, 2 and 3, the variables linked respectively to sections 3, 4 and 5 of the research tool, presented in Table 2, were grouped using factorial analysis - the aim of this procedure was to identify factors or dimensions underlying the data that summed up the evaluations (Hair, Anderson, Tatham, & Black, 1998) – and the research performed a difference of means test. For the other hypotheses, derived from the previous three, the variables were grouped, based on documental analysis, according to their face and construct validity (Babbie, 1995) in order to identify the variables that best summed up what the research was trying to measure with each of these hypotheses. The research thus used two forms of evaluation for the research hypotheses: (i) a factorial analysis followed by an analysis of the difference of means between the groups formed by the situation before and the situation after the deployment of the model and (ii) selection and grouping of significant variables – undertaken by the researchers followed by an analysis of the difference of means between these groups. The data grouped around factors, whether supported by the factorial or qualitative analysis, were substituted by the arithmetic average of the components of the new JISTEM, Brazil Vol. 10, No.3,Sept/Dec 2013, pp. 621-642

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636 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

factors/groups, and some missing values were replaced by averages, thus computing compound averages. (Hair et al., 1998). As a result of the factorial analysis process, the following factors – two for each of the main hypotheses (1,2 and 3) – were extracted to evaluate these research hypotheses: (i) “Internal Processes” and “Perception of Quality” factors related to hypothesis 1, (ii) “Strategic Prioritization of Demands” and “IT Area – Business Area Relationship” factors related to hypothesis 2, and (iii) “IT Governance” and “Perceptions Outside the Organization” factors related to hypothesis 3. The reliability of factors and groups of variables verified by Cronbach’s Alpha attained values of over 0.7 in all cases, thus above the acceptable limit (Hair et al., 1998). The evaluation of the differences between the averages of the factors and the groups of variables in the situations before and after the deployment of the relationship model used the non-parametric statistical test - Wilcoxon signed-rank test for matched pairs - in order to analyze differences between paired observations and which take into account the magnitude of differences (Malhotra, 2006). Thus, the test exhibits the number of negative differences, positive differences and equalities between the paired evaluations and also presents the probability associated with the Z statistic which, when lower than the level indicating the probability of occurring unwarranted rejection of the null hypothesis – significance level defined in this case as 0.05 – indicates a statistically significant difference. Evaluating the significance level of the Z statistic, associated with the Wilcoxon tests, applied to the factors and groups of variable cited, it was possible to verify that, with the exception of the “IT Area- Business Area Relationship” factor and the group of variables related to hypothesis 1.a, the significance levels were lower than 5%, indicating significant differences between the averages. In the case of the factors/groups of variables that showed a significant difference, the research also verified that, in most cases, the evaluations relating to the situation after the deployment of the relationship model were considerably more favorable than in the case of the previous situation, thus evidencing perceptions of the model’s adequateness. Table 7 presents, for each hypothesis, the averages of the evaluations before and after the model. The averages of each of the factors related to the main research hypotheses and the groups of variables related to the additional assumptions are shown in the following table.

Hypothesis/Factor

Before / After theModel do Modelo

Sig. Qty.

Avera Dif. ge

Before

130

2,495

After

130

3,251

Hypothesis 1 – Factor “Perception of Quality”

Before

130

3,208

After

130

3,447

Hypothesis 2 – Factor “Strategic Prioritization of Demands”

After

128

2,396

After

128

3,162

Hypothesis 2 – Factor “IT Area- Business Area Relationship”

Before

128

3,040

After

128

3,099

Hypothesis 1 – Factor “Internal Processes”

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Impacts of a Relationship Model on Informational Technology Governance: An Analysis of Managerial Perceptions in Brazil

Hypotheis 3 – Factor “IT Governance” Hypothesis 3 – Factor “Perceptions Outside the Organization” Hypothesis 1.a Hypothesis 1.b Hypothesis 2.a Hypothesis 2.b Hypothesis 2.c Hypothesis 3.a Hypothesis 3.b

Before

128

2,129

After

128

3,110

Before

115

2,304

After

115

3,276

Before

3,107

After

3,223

Before

2,186

After

3,283

Before

2,782

After

3,137

Before

1,961

After

3,100

Before

128

2,896

After

128

3,172

Before

2,539

After

3,282

Before

1,798

After

3,115

637

* *

* * * * * *

Table 7 – Averages of the Evaluations of the Situations Before and After the Model

* P < 0,05 Thus, based on the tests performed, one can affirm that at a significance level of 5%, the averages between the groups are different for all factors, with the exception of the “IT Area – Business Area Relationship”, for which the null hypothesis of equality of means was not rejected, and for the group of variables related to hypothesis 1.a. Thus hypotheses 2 and 1.a. were rejected. In the analysis of hypothesis 2.a. owing to the large number of equalities, it was possible to conclude that the relationship model had only a moderate effect on this group of variables, although the hypothesis was confirmed. Analyzing the overall results, one can see that, in all cases, the averages of the evaluations of the situation before the deployment of the model, performed by the business areas for all factors used to evaluate the main hypotheses, were greater than the averages of the evaluations of this same period performed by IT area managers. In other words, the perception of business area managers in relation to the situation before the model was more favorable than that of IT area managers. While in the case of IT area managers the comparison of the situations before and after the deployment of the relationship model, measured by the averages of factors, shows an increase in the perception of adequateness in the case of all factors, business area managers only perceived this in the case of four factors (“Internal Processes”, Strategic Prioritization of Demands”, “IT Governance” and “Perceptions Outside the

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638 Scheeren, A. W., Fontes-Filho, J. R., Tavares, E.

Organization”). Table 8 summarizes the results of the evaluations of the research hypotheses, indicating which were confirmed or rejected: No.

Hypothesis: In an organization with a relationship model Evaluation instituted between business areas and the IT area...

managers identify improvements in the quality of IT solutions Confirmed developed.

1.a

managers of business areas identify an increase in the level of satisfaction of business area expectations on the part of the IT Rejected area.

1.b

managers of the IT area identify a greater clarity in the demands Confirmed passed on by business areas to the IT area.

managers identify an increase in the level of strategic alignment Rejected between areas.

2.a

managers of business areas know and understand the needs of Confirmed the IT area.

2.b

managers of the IT area know and understand the strategies and Confirmed needs of business areas.

2.c

managers perceive IT as a strategic partner of the business Confirmed areas and not as a mere technology provider.

levels of IT governance and corporate governance are perceived by managers to be greater than without the use by the Confirmed organization of this kind of model.

3.a

managers of business areas understand that the organization’s levels of corporate governance are increased and that the risks Confirmed to the organization represented by the IT area are known.

3.b

managers of the IT area understand that the levels of IT governance are enhanced and that the risks to the organization’s Confirmed business represented by the IT area are known. Table 8 – Results of the Evaluations of the Research Hypotheses

5. CONCLUSION One of the aims of IT governance, considered in conjunction with its associated mechanisms, is to facilitate alignment between ISs and business strategies. The case study presented in this paper, considering a relationship model designed to facilitate the selection and prioritization of IT projects, made it possible to demonstrate the validity of the hypotheses formulated - based on a review of the literature - regarding the model’s positive impacts. The managers of the organization, as a result of the deployment of this relationship model, were able to perceive improvements in the quality of the technological solutions developed, an increase in the levels of IT and organizational governance and the value of the IT area as a business partner. The managers of the IT area recorded a greater clarity in the demands made by the business areas, an increase in the levels of knowledge and understanding of the strategies and

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needs of the organization’s business areas and an increase in the levels of governance and risks involved in IT. However, the managers in the sample did not observe an increase in the level of strategic alignment between the areas of the organization with the introduction of the model which could be attributed to the greater complexity resulting from the greater number of stages and actors involved. It is significant to also observe that managers did not identify an increase in the business areas’ level of satisfaction regarding their expectations relating to the IT area. The results showed that for these managers the benefits expected from the deployment of the model were not perceived by the business areas to the same extent as by the IT area. It is possible that the organization’s business areas lacked adequate resources to cope with the greater complexity resulting from the new relationship model and which would have reduced the costs of adaptation and given the managers of these areas a clearer perception of the gains obtained from the implementation of this process. But it is also possible to suppose that other variables influenced managers’ perceptions, such as the power relations between areas, past conflicts or even the actual training of managers related to the development of competencies in aspects necessary for the definition of models and the negotiation of prioritization agreements. Future studies could monitor other variables and contingent factors that could influence managers’ perceptions. The main contribution of this study lies in the evaluation of the way a relationship model of this kind affects some organizational aspects, such as (i) the quality of the organization’s technological solutions, (ii) strategic alignment between the business areas and the IT area – contributing to the development of a closer degree of partnership between these areas –, (iii) management of the risks of technological solutions in the firm and (iv) the organization’s levels of governance. The results described can be applied to various types of large organizations that also have a great number of business areas which demand technological solutions and need to develop their IT governance processes. These organizations can understand the impacts of this type of relationship model, obtaining information that could be useful for drawing up their own IT governance strategies. However, one should consider the fact that the efficient functioning of these kinds of models depends on various contingent factors (Sambamurthy & Zmud, 1999; De Haes & Van Grembergen, 2004; Xue et al., 2008, Dameri & Perego, 2010) and this imposes limitations on the results of this research that are inherent to the case study method, given that it records only the contingencies of the firm and sector chosen. Moreover, the choice of an organization in the banking sector means that one should also consider the limitations imposed by the sector’s high degree of regulation on the firm’s strategic choices and decisions regarding operational resources. REFERENCES Andrade, L. P. (2005). Governança corporativa dos bancos no Brasil. (Masters dissertation). Pontifícia Universidade Católica. Rio de Janeiro, Rio de Janeiro, RJ, Brasil. Retrieved from <www.maxwell. lambda.ele.puc-rio.br/cgibin/PRG_0599.EXE/6673_1.PDF?NrOcoSis=1 8862&CdLinPrg=pt>.

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Kjaer, A. M. Governance. (2004). Cambridge: Polity Press. Laartz, J., Monnoyer, E., & Scherdin, A. (2003). Designing IT for business. McKinsey Quarterly, 3, 77–84. Loh, L., & Venkatraman, N. (1993). Diffusion of information technology outsourcing: Influence sources and the Kodak effect. Information Systems Research, 3(4), 334–359. Luftman, J. N. (1996). Competing in the information age. Oxford: Oxford University Press. Lunardi, G. L., & Dolci, P. C. (2009). Governança de TI e seus mecanismos: uma análise da sua disseminação entre as empresas brasileiras. Anais do Encontro de Administração da Informação, Recife, Brasil, 2. Lutchen, M. (2003). Managing IT as a business: a survival guide. Hoboken: John Wiley & Sons. Malhotra, N. K. (2006). Pesquisa de Marketing: uma orientação aplicada (4a ed.). Porto Alegre: Bookman. Muhanna, W. A., & Stoel, M. D. (2010). How do investors value IT? An empirical investigation of the value relevance of IT capability and IT spending across industries. Journal of Information Systems, 24(1), 43–66. Nolan, R., & McFarlan, F. (2005). Information technology and the board of directors. Harvard Business Review, 83(10), 96–106. Prahalad, C. K. (2006). CIOs Hold key to operational excellence. Optimize, 5(5), 66. Raghupathi, W. (2007). Corporate governance of IT: A framework for development. Communications of the ACM, 50(8), 94–99. Rau, K. (2004, Fall). Effective governance of IT: design, objectives, roles, and relationships. Information Systems Management, 21(4,) 35–42. Roberts, R., & Sikes, J. (2008, November). McKinsey global survey results: IT’s Unmet Potential. McKinsey Quarterly. Retrieved from https://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2277. Rodrigues, L. C., Maccari, E. A., & Simões, S. A. (2009). O desenho da gestão da tecnologia da informação nas 100 maiores empresas na visão dos executivos de TI. Journal of Information Systems and Technology Management, 6(3), 483–506. Sambamurthy, V., & Zmud, R. (1999). Arrangements for information technology governance: A theory of multiple contingencies. MIS Quarterly, 23(2), 261–290. Shpilberg, D. Berez, S., Puryear, R. & Shah, S. (2007). Avoiding the alignment trap in information technology. MIT Sloan Management Review, 49(1), 51–58. Simonsson, M., Johnson, P., & Ekstedt, M. (2010). The effect of IT governance maturity on IT governance performance. Information Systems Management, 27(1), 10– 24.

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Tavares, E., & Thiry-Cherque, H. (2011). Interaction between information systems and work in the Brazilian banking sector. Revista de Administração de Empresas, 51(1), 84– 97. Van Grembergen, W., De Haes, S., & Guldentops, E. (2004). Structures, Processes and Relational Mechanisms for IT Governance. In W. Van Grembergen (Ed.). Strategies for Information Technology Governance (pp.1–36). Hershey: Idea Group Publishing. Weill, P. (2004). Don’t just lead govern how top-performing firms govern IT. MIS Quarterly Executive, 3(1), 1–17. Weill, P., & Ross, J. W. (2006). Governança de TI: tecnologia da informação. São Paulo: M. Books. Xue, Y., Liang, H., & Boulton, W.R. (2008). Information Technology Governance in Information Technology Investment Decision Processes: The Impact of Investment Characteristics, External Environment, and Internal Context. MIS Quarterly, 32(1), 6796.

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Conference

11th CONTECSI International Conference on Information Systems and Technology Management May 28th to 30th, 2014 USP/São Paulo/SP FEA USP São Paulo, Brazil The 11th International Conference on Technology and Information Systems Management CONTECSI is an event focusing Technology and Information Systems Management under a multidisciplinary view. CONTECSI aims at putting together academics and professionals involved in IT and Systems management for a state-of-the-art discussion. International researchers are expected to contribute for the integration between the academic and the professional communities. The Conference welcomes papers submission for presentation and panel discussions. Major topics on interest include, but are not limited to: Information Society, Open Systems, Systems Interfacing and Integration, Wireless Computing, Entrepreneurship in IT and IS, Accounting Information Systems, E-Commerce / E-Business, Software Engineering, ERP Systems, Financial Management in Information Systems, IT Strategic Management, etc. Submit online a full paper and abstract in English, Spanish or Portuguese by January, 19th, 2014. All papers will be subject to a blind review process and full papers will be published (CD) in the Conference Proceedings.

More information: http://www.tecsi.fea.usp.br/eventos/contecsi Coordination: Prof. Edson Luiz Riccio. PhD – FEA USP and TECSI Contact: contecsi@usp.br

11º CONTECSI Congresso Internacional de Gestão da Tecnologia e Sistemas de Informação 28, 29 e 30 de Maio de 2014 USP/São Paulo/SP FEA USP São Paulo, Brasil O 11º Congresso Internacional de Gestão da Tecnologia e Sistemas de Informação CONTECSI visa reunir acadêmicos e profissionais envolvidos com a temática de gestão para discussão do Estado-da-arte deste campo. Atualmente este campo encontrase disperso em áreas específicas, carecendo de uma visão holística e integrada do assunto. O CONTECSI contará com a presença de palestrantes de renome, bem como estará aberto para a recepção de trabalhos para serem apresentados em sessões paralelas e painéis. Assim como compareceram nos anos anteriores, são esperados personalidades, professores e pesquisadores do Brasil e do exterior, principalmente de Universidades da França, Inglaterra, Espanha, México, Portugal, Chile, Argentina, Colômbia, Uruguai, Venezuela entre outras. Os foco de interesse deste congresso inclui todas as abordagens referentes à gestão de Tecnologia e dos Sistemas de Informação nas instituições publicas e privadas e na sociedade em geral. Data final para envio de trabalhos: 19 de Janeiro de 2014 Mais informações no site: http://www.tecsi.fea.usp.br/eventos/contecsi Coordenação: Prof. Dr. Edson Luiz Riccio – FEA USP e TECSI Contato: contecsi@usp.br

JISTEM Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação ISSN online: 1807–1775

Every four months/Quadrimestral

1) Paper Submission Guidelines Register at "Online Submissions" and submit your paper accordingly to JISTEM guidelines at www.jistem.fea.usp.br a) Manuscript style Articles must be submitted in English, Spanish, Portuguese or French in MS-Word format. Authors must translate the final version of the article to English. Fill the submission form with: title of the article, author's full name, affiliation, full address, telephone, email, fax and brief curriculum vitae. Limit of 3 co-authors per article. First page must present: title of the article, abstract in the original language of the article of about 100 words, title, area and 5 keywords (if accepted an abstract in English and keywords will be required), Articles must be limited to 30 pages in double-space, Arial or times new roman, 12 points; Authors must include figures and graphics in high-resolution 300 dpi (jpg or gif). They must be numbered (Arabic) and with the complete title. References to each table or figure have to be made in the text. Authors must submit the questionnaires and research results to the editor and review purposes. Acknowledgments to institutions regarding financial support can be included only in the final accepted version. We do not accept articles published elsewhere, except Conference proceedings. b) Structure Style Articles should clearly present the Abstract, Introduction, Objectives, Justification, Question, literature review, research method, results, conclusion, recommendation and limitation, plus references; References are to follow the American Psychological Association (APA) guidelines. More detailed explanations and examples of these guidelines can be found at the following locations: http://www.apastyle.org/faqs.html or Publication Manual of the American Psychological Association (6th ed., 2010) American Psychological Association (APA).A list of reference must be presented in alphabetical order. A glossary can be included in the end of the article if needed. 2) Book Review Book review should be sent by Prof. Edson Luiz Riccio at jistem@usp.br

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Contributions / Submissão de Artigos

645

1) Instruções para submissão de artigo a) Quanto à Formatação Os artigos submetidos para publicação, em inglês, espanhol, português ou francês, devem ser enviados em formato MS-Word. Após aceito, os autores devem traduzir o artigo para o idioma inglês. Incluir no sistema de submissão online: título, subtítulo (se houver), tema, nome, instituição, departamento, endereço, telefone, fax e e-mail do autor e co-autores (máximo de 3 co-autores) e breve curriculum que indique sua formação, instituição/empresa a que pertence e sua área atual de trabalho.; Na primeira página do artigo deve constar: título, subtítulo (se houver), tema e resumo na língua original do artigo, com 100 palavras aproximadamente e 5 (cinco) palavraschaves. Se o artigo for aceito para publicação será solicitado o envio do título, abstract e palavras-chave em inglês; Os artigos deverão ter no máximo 30 páginas em espaço duplo, fonte arial ou times new roman, tamanho 12; As figuras e gráficos devem estar em alta qualidade com resolução de 300 dpi (figuras) e extensão jpg e/ou gif no artigo. Cada ilustração deve conter numeração e legenda. Deve ser feita referência à figura ou tabela no corpo do texto. Questionários e resultados da pesquisa devem ser enviados para a avaliação do Editor e pareceristas. Agradecimentos a órgãos de financiamento da pesquisa devem ser incluídos apenas na versão final do artigo, após o aceite. A JISTEM só aceita artigos inéditos. b) Quanto à Estrutura Os artigos enviados devem conter em seus tópicos os seguintes itens: Resumo, Introdução, Objetivos, Justificativa, Problema/Questão, Revisão da Literatura, Metodologia, Resultados, Conclusão, Recomendações, Limitações e Referência Bibliográfica; As citações e referências devem seguir o estilo da APA (http://www.apastyle.org/l) As referências deverão ser apresentadas no corpo do texto, incluindo o sobrenome do autor, a data de publicação e o número de página (se for o caso), conforme normas da APA. Referências bibliográficas completas do(s) autor (es) citados deverão ser apresentadas em ordem alfabética, no final do texto, de acordo com as normas da APA. Para maiores informações: American Psychological Association (APA). (2001).

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Publication Manual of the American Psychological Association (5th ed.). Washington, DC Poderá ser incluído um glossário ao final do artigo, caso o autor julgue necessário; 2) Sugestões de livros para Resenha Resenhas devem ser enviadas para o Prof. Edson Luiz Riccio pelo e-mail: jistem@usp.br

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JISTEM Journal of Information Systems and Technology Management Revista de Gestão da Tecnologia e Sistemas de Informação Vol.10, No.3, Set/Dez, 2013, pp. 647- 657 ISSN online: 1807-1775

Editor E.L.Riccio (2004-presente/present) Avaliadores Ad Hoc – 2013 Ad Hoc Reviewers – 2013 Aguinaldo Aragon Fernandes Ana Paula Paulino Costa Angel Freddy Godoy Viera Antonio Carlos Gastaud Maçada Antonio de Padua Albuquerque Oliveira Antonio J Balloni César Augusto Biancolino Clarissa Carneiro Mussi Cristiane Drebes Pedron Cristina Dai Prá Martens Cristine Gusmão Daniel Arruda Coronel

Aragon Consulting Management, Brazil Federal University of São Paulo, UNIFESP, Brazil Federal University of Santa Catarina, Brazil Federal University of Rio Grande do Sul, Brazil State University of Rio de Janeiro, Brazil Center of Inf.Technology Renato Archer, Brazil Nove de Julho University, UNINOVE, Brazil University of Southern Santa Catarina, Brazil Nove de Julho University, UNINOVE, Brazil Nove de Julho University, UNINOVE, Brazil Federal University of Pernambuco (CCS UFPE), Brazil Federal University of Santa Maria (UFSM), Brazil

Edivandro Carlos Conforto Ernesto Fernando Rodrigues Vicente Fabiano Maury Raupp Fabricio Sobrosa Affeldt Fernando Bigares Charrua-Santos Gonzalo Travieso Helio Raymundo Ferreira Filho Ivan Luiz Marques Ricarte Jonathan Abramson Jorge Rady de Almeida Jr Jose Alberto Carvalho dos Santos Claro José Antonio Gomes de Pinho Jose Cardenas Medina José Carlos Vaz Jose Dutra de Oliveira Neto José Francisco Ramos Zanca Joshua Onome Imoniana Julio César Nievola Karina Machado Lidia Angulo Meza Ligia Capobianco Liliane Cristina Segura Luc Marie Quoniam Luis Hernan Contreras Pinochet Luiza Goncalves de Paula

University of São Paulo, São Carlos (USP), Brazil University of the State of Santa Catarina, Brazil University of the State of Santa Catarina, Brazil Federal Inst. of Ed., Science and Tech. of IFRS, Brazil University of Beira Interior, Portugal University of São Paulo, São Carlos, USP, Brazil University of Pará, Brazil State University of Campinas, UNICAMP, Brazil Northwestern Connecticut Community College, USA University of São Paulo, USP, Brazil Methodist University of São Paulo - UMESP, Brazil Federal University of Bahia (UFBA), Brazil University of São Paulo, USP, Brazil University of São Paulo, USP, Brazil University of São Paulo, Ribeirão Preto (USP), Brazil Lab. Tech., business management and env. Brazil Mackenzie Presbyterian University, Brazil Pontifical Catholic University of Paraná, Brazil Federal University of Rio Grande, Brazil Federal Fluminense University (UFF) , Brazil University of São Paulo, USP, Brazil Mackenzie Presbyterian University, Brazil University of South Toulon - Var, France Federal University of São Paulo, UNIFESP, Brazil Caixa Economica Federal, REDEARJ , Brazil

648 Editorial Information /Ad Hoc reviewers/ Content 2013

Marcirio Chaves Maria Cristiane Barbosa Galvão María de la Concepción de Celis Herrero Mariana de Aragão Pereira Mario Procopiuck Miklos A Vasarhelyi Moacir Jose Santos Napoleao Verardi Galegale Napoleao Verardi Galegale Nicolau Reinhard Octavio Mendonca Paul Byrnes Paul Eric Byrnes Paulo Caetano da Silva Pierre Ohayon Pietro Cunha Dolci Regiane Relva Romano Renato Jose Sassi Roberto de Camargo Penteado Filho Roberto Delgado Arteiro Rúbia Eliza de Oliveira Schultz Ascari Sahudy Montenegro González Stephen P. Kozlowski Theodoro Peters WALTER CASTELNOVO Yusmadi Yah Jusoh

Nove de Julho University, Brazil University of São Paulo, Ribeirão Preto, USP, Brazil Autonomous University of Puebla, Mexico EMBRAPA, Brazil Federal Court of First Grade in Paraná, Brazil Rutgers University, USA Taubaté University, Brazil Pontifical Catholic University of São Paulo, Brazil Pontifical Catholic University of São Paulo, Brazil University of Sao Paulo, Brazil Mackenzie Presbyterian University, Brazil Rutgers University, USA Rutgers University, USA Salvador University, NUPERC - Nucleus Research Networks and Computing, Brazil Federal University of Rio de Janeiro, Brazil Federal University of Rio Grande do Sul, Brazil VIP Computer Systems & Consulting, Brazil Nove de Julho University, Brazil Brazilian Enterprise for Agricultural Research, Department of Strategic Management - SGE, Brazil Federal University of Pernambuco, Brazil Federal Technological University of Paraná, Brazil Federal University of São Carlos, Brazil University of Vermont, USA Ignatian Educational Foundation (FEI), Brazil University of Insubria, Italy Universiti Putra, Malaysia

Editorial Information - Informações Editoriais Total of Published Texts / Total de Textos Publicados Articles / Artigos Inéditos Conference Reports / Relatórios de Conferências Authors from Brazil / Autores do Brasil Authors Outside Brazil / Autores do Exterior Articles in English / Artigos em Inglês Articles in Spanish / Artigos em Espanhol Articles in Portuguese / Artigos em Português Time from submission to feedback including review Tempo de submissão à resposta aos autores com revisão 1-16 semanas/weeks 10% 17-40 semanas/weeks 70% + 41 semanas/weeks 20% Tempo/Range 1-42 JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013 p.647-657

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2013 32 31 1 52 18 29 1 2

Editorial Information /Ad Hoc reviewers/ Content 2013

649

Indice de rejeição - Rejection rate 50%

Proofreading Services / Revisão Contact Language

Index per author 2013 / Indice por autor 2013

Author/Institution/Number

Article/Page

Number 1 / Número 1 ALMEIDA, Lauro Brito de, UFPR - Federal University of Parana, PR, Brazil, Business Professionals’ Perceptions Related to the Influence of Information Technology in Individual Work, Volume 10 – Número 1 – Jan – Abr 2013

pp. 41-60

ANTONELLI, Ricardo Adriano, UTFPR – Federal Technological University of Parana/ Pato Branco, PR, Brazil, Business Professionals’ Perceptions Related to the Influence of Information Technology in Individual Work, Volume 10 – Número 1 – Jan – Abr 2013

pp. 41-60

ANTUNES, Maria Thereza P, Mackenzie Presbyterian University, SP, Brazil

pp. 119-144

The forensic accounting and corporate fraud, Volume 10 – Número 1 – Jan – Abr 2013 BATTISTELLA, Luciana Flores, Federal University of Santa Maria, RS/Brazil, Impacto Da Abordagem De Vendas Na Aceitação De Produtos Com Inovações Tecnológicas, Volume 10 – Número 1 – Jan – Abr 2013

pp.177-197

CHAUVEL (in memoriam), Marie Agnes, Federal University of São João del Rei (UFSJ), MG, Brazil, The Decision-Making Process to Purchase from Online Supermarkets: A Qualitative Research with Customers from ‘Zona Sul Atende’, Volume 10 – Número 1 – Jan – Abr 2013

pp. 81-98

CÔRTES, Pedro Luiz, Nove de Julho University and ECA/University of São Paulo, SP, Brazil, Conception And Development Of A System Used To Organize And Facilitate Access To Environmental Information, Volume 10 – Número 1 – Jan – Abr 2013

pp. 161-176

ESPEJO, Márcia Maria dos Santos Bortolocci, UFPR - Federal University of Parana, Brazil, Business Professionals’ Perceptions Related to the Influence of Information Technology in Individual Work, Volume 10 – Número 1 – Jan – Abr 2013

pp. 41-60

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FORMIGONI, Henrique, Mackenzie Presbyterian University, SP, Brazil , The forensic accounting and corporate fraud, Volume 10 – Número 1 – Jan – Abr 2013

pp. 119-144

GROHMANN, Márcia Zampieri, Federal University of Santa Maria, RS/Brazil, O Impacto Da Abordagem De Vendas Na Aceitação De Produtos Com Inovações Tecnológicas, Volume 10 – Número 1 – Jan – Abr 2013

pp.177-197

GRANDE, Eliana Tiba Gomes, Goiano Federal Institute - Iporá Campus, GO, Brazil, Beef Traceability by Radio Frequency Identification System in the Production Process of a Slaughterhouse, Volume 10 – Número 1 – Jan – Abr 2013

pp. 99-118

IMONIANA, Joshua Onome, Mackenzie Presbyterian University, SP, Brazil, The forensic accounting and corporate fraud, Volume 10 – Número 1 – Jan – Abr 2013

pp. 119-144

LONGHI, Fernanda Luiza, FADEP – Faculty of Pato Branco, PR, Brazil, Business Professionals’ Perceptions Related to the Influence of Information Technology in Individual Work, Volume 10 – Número 1 – Jan – Abr 2013

pp. 41-60

MARREIROS, Cristina Galamba, University of Évora/CEFAGE, Portugal, E-Mail Usage Practices In Organizational Context: A Study With Portuguese Workers Volume 10 – Número 1 – Jan – Abr 2013

pp. 05-20

MOREIRA, André Barcelos, Pontific Catholic University of Rio de Janeiro, RJ, Brazil, The Decision-Making Process to Purchase from Online Supermarkets: A Qualitative Research with Customers from ‘Zona Sul Atende’ Volume 10 – Número 1 – Jan – Abr 2013

pp. 81-98

QUARESMA, Rui Filipe Cerqueira, University of Évora/CEFAGE, Portugal, E-Mail Usage Practices In Organizational Context: A Study With Portuguese Workers, Volume 10 – Número 1 – Jan – Abr 2013

pp. 05-20

ROSES, Luís Kalb, Catholic University of Brasília, DF, Brazil, Strategic Partnership Formation in IT Offshore Outsourcing: Institutional Elements for a Banking ERP System Licensing Volume 10 – Número 1 – Jan – Abr 2013

pp. 61-80

SILVA, Renata Céli Moreira da, Pontific Catholic University of Rio de Janeiro, RJ, Brazil, The Decision-Making Process to Purchase from Online Supermarkets: A Qualitative Research with Customers from ‘Zona Sul Atende’ Volume 10 – Número 1 – Jan – Abr 2013

pp. 81-98

SILVA , Sílvia Paula Rosa da, University Instituto Politécnico Tomar – IPT, Portugal, E-Mail Usage Practices In Organizational Context: A Study With Portuguese Workers Volume 10 – Número 1 – Jan – Abr 2013

pp. 05-20

SILVEIRA, Amélia, UNINOVE University Nove de Julho, SP, Brazil, Knowledge as a Competitive Advantage in Private Security: A Study In a Company in Santa Catarina, Brazil Volume 10 – Número 1 – Jan – Abr 2013

pp. 21-40

SUZART, Janilson, University of São Paulo, SP, Brazil, End-user satisfaction with the Integrated System of Federal Government Financial Administration (SIAFI): a case study Volume 10 – Número 1 – Jan – Abr 2013

pp. 145-160

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VELTER, Aline, Federal University of Santa Maria, RS/Brazil, O Impacto Da Abordagem De Vendas Na Aceitação De Produtos Com Inovações Tecnológicas Volume 10 – Número 1 – Jan – Abr 2013

pp.177-197

VIEIRA, Sibelius Lellis, Pontifical Catholic University of Goiás, GO, Brazil, Beef Traceability by Radio Frequency Identification System in the Production Process of a Slaughterhouse Volume 10 – Número 1 – Jan – Abr 2013

pp. 99-118

Number 2 / Número 2 AFFELDT, Fabricio Sobrosa, , Federal Institute of Education, Science and Technology of Rio Grande do Sul, Porto Alegre, Rio Grande do Sul, Brazil, Information architecture analysis using business intelligence tools based on the information needs of executives Volume 10 – Número 2 – Mai – Ago 2013

pp. 251-270

ALDERETE, María Verónica, Universidad Nacional del Sur, Bahía Blanca, Argentina, Do Information and Communication Technology access and innovation increase outsourcing in small and medium enterprises? Volume 10 – Número 2 – Mai – Ago 2013

pp. 303-322

ALLASSANI, William, University of Professional Studies, LegonAccra, Ghana, The impact of it governance on it projects -the case of the ghana rural bank computerization and inter-connectivity project Volume 10 – Número 2 – Mai – Ago 2013

pp. 271-286

ARANDA, Yadira Robles, Universidad de las Ciencias Informáticas, Ciudad de la Habana, Cuba, Integración de los algoritmos de minería de datos 1R, PRISM E ID3 A POSTGRESQL Volume 10 – Número 2 – Mai – Ago 2013

pp. 389-406

ÁVILA, Lourdes Francisca García, Central University "Marta Abreu" from Las Villas, Santa Clara, Cuba, The Evaluation and Improvement of IT Governance, Volume 10 – Número 2 – Mai – Ago 2013

pp. 219-234

CAPOBIANCO, Ligia, TECSI/University of Sao Paulo, São Paulo, Sao Paulo, Brazil, Resultados do 10º. CONTECSI / Outcomes of the 10th CONTECSI – International Conference on Information Systems and Technology Management Volume 10 – Número 2 – Mai – Ago 2013

pp. 407-455

CESTARI, Jose Marcelo Almeida Prado, Pontifical Catholic University of Parana, Curitiba, Parana, Brazil, Achieving maturity (and measuring performance) through model-based process improvement Volume 10 – Número 2 – Mai – Ago 2013

pp. 339-356

COKER, Brent Lynn Selby, University of Melbourne, St Victoria, Australia, Antecedents to website satisfaction, loyalty, and word-ofmouth Volume 10 – Número 2 – Mai – Ago 2013

pp. 209-218

DEL-MASSO, Maria Candida Soares, UNESP Sao Paulo State University, Marília, Sao Paulo, Brazil, Information technology as a technical resource for the memories: memories of UNATI-Marília in the virtual environment, Volume 10 – Número 2 – Mai – Ago 2013

pp. 377-388

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652 Editorial Information /Ad Hoc reviewers/ Content 2013

GALVIS-LISTA, Ernesto, Universidad del Magdalena, Santa Marta, A critical review of knowledge management in software process reference models Volume 10 – Número 2 – Mai – Ago 2013

pp. 322-338

HASAN, Layla, Zarqa University, Zarqa, Jordan Using university ranking systems to predict usability of University websites Volume 10 – Número 2 – Mai – Ago 2013

pp. 235-250

JÚNIOR, Sady Darcy da Silva, Federal Institute of Education, Science and Technology of Rio Grande do Sul, Porto Alegre, Rio Grande do Sul, Brazil Information architecture analysis using business intelligence tools based on the information needs of executives Volume 10 – Número 2 – Mai – Ago 2013

pp. 251-270

KRESPI, Nayane Thais, Regional University of Blumenau, Blumenau, Santa Catarina, Brazil, Legitimation implications in the process of implementing an ERP system in a holding company Volume 10 – Número 2 – Mai – Ago 2013

pp. 287-302

LAVARDA, Carlos Eduardo, Regional University of Blumenau, Blumenau, Santa Catarina, Brazil, Legitimation implications in the process of implementing an ERP system in a holding company Volume 10 – Número 2 – Mai – Ago 2013

pp. 287-302

LIMA, Edson Pinheiro de, Pontifical Catholic University of Parana, Curitiba, Parana, Brazil, Achieving maturity (and measuring performance) through model-based process improvement Volume 10 – Número 2 – Mai – Ago 2013

pp. 339-356

LORENCES, Patricia Pérez, Central University "Marta Abreu" from Las Villas, Santa Clara, Cuba The Evaluation and Improvement of IT Governance Volume 10 – Número 2 – Mai – Ago 2013

pp. 219-234

OLIVEIRA, Leonardo Rocha de, Pontifical Catholic University of Rio Grande do Sul - PUCRS, Porto Alegre, Rio Grande do Sul, Brazil, Measurement process of software development projects for supporting strategic business objectives in software developing companies Volume 10 – Número 2 – Mai – Ago 2013

pp. 357-376

PAIVA, Simone Borges, University of São Paulo, Sao Paulo, Brazil Information technology as a technical resource for the memories: memories of UNATI-Marília in the virtual environment

pp. 377-388

Volume 10 – Número 2 – Mai – Ago 2013 PEDROSO, Sandra Lais, Pontifical Catholic University of Rio Grande do Sul - PUCRS, Porto Alegre, Rio Grande do Sul, Brazil, Measurement process of software development projects for supporting strategic business objectives in software developing companies Volume 10 – Número 2 – Mai – Ago 2013

pp. 357-376

RICCIO, Edson Luiz, Universidade de São Paulo, São Paulo, Brazil Resultados do 10º. CONTECSI / Outcomes of the 10th CONTECSI – International Conference on Information Systems and Technology Management Volume 10 – Número 2 – Mai – Ago 2013

pp. 407-455

SAKATA, Marici Gramacho, TECSI/University of Sao Paulo, São pp. 407-455 Paulo, Sao Paulo, Brazil Resultados do 10º. CONTECSI / Outcomes of the 10th CONTECSI – International Conference on Information

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Systems and Technology Management Volume 10 – Número 2 – Mai – Ago 2013 SÁNCHEZ-TORRES, Jenny Marcela, Universidad Nacional de Colombia, Bogotá, Colombia A critical review of knowledge management in software process reference models Volume 10 – Número 2 – Mai – Ago 2013

pp. 323-338

SANTOS, Eduardo Alves Portela, Pontifical Catholic University of Parana, Curitiba, Parana, Brazil Achieving maturity (and measuring performance) through model-based process improvement Volume 10 – Número 2 – Mai – Ago 2013

pp. 339-356

SOTOLONGO, Anthony R., Universidad de las Ciencias Informáticas, Ciudad de la Habana, Cuba Integración de los algoritmos de minería de datos 1R, PRISM E ID3 A POSTGRESQL Volume 10 – Número 2 – Mai – Ago 2013

pp. 389-406

THEISS, Viviane, Regional University of Blumenau, Blumenau, Santa Catarina, Brazil Legitimation implications in the process of implementing an ERP system in a holding company Volume 10 – Número 2 – Mai – Ago 2013

pp. 287-302

VALENTE, Nelma Terezinha Zubek, Universidade Estadual de Ponta Grossa, Parana, Brazil Resultados do 10º. CONTECSI / Outcomes of the 10th CONTECSI – International Conference on Information Systems and Technology Management Volume 10 – Número 2 – Mai – Ago 2013

pp. 407-455

VALLE, Arthur Maria do, Pontifical Catholic University of Parana, Curitiba, Parana, Brazil Achieving maturity (and measuring performance) through model-based process improvement Volume 10 – Número 2 – Mai – Ago 2013

pp. 339-356

Number 3 / Número 3 BIGUETI, José Roberto, University of São Paulo, São Paulo, Brazil The Influence of Shared Mental Models Between the CIO and the Top Management Team on the Strategic Alignment of Information Systems: a Comparison Between Brazilian and US Companies Volume 10 – Número 3 – Set – Dez 2013 CRAWFORD, Jeff, Lipscomb University Nashville, TN, USA The Role of Worker Tenure and Employment Heterogeneity on Software Development Work Activities Volume 10 – Número 3 – Set – Dez 2013

pp. 501-518

pp. 483-502

FERNANDES, Marcelo Eloy, Universidade Nove de Julho, Sao Paulo, pp. 577-596 Sao Paulo, Brazil Information Technology Management System: an Analysis on Computational Model Failures for Fleet Management Volume 10 – Número 3 – Set – Dez 2013 FONTES-FILHO, Joaquim Rubens, Getulio Vargas Foundation, Brazil Impacts of a Relationship Model on Informational Technology Governance: An Analysis of Managerial Perceptions in Brazil Volume 10 – Número 3 – Set – Dez 2013

pp. 642-664

JONES, Kiku, Quinnipiac University, Hamden, CT, USA The Role of pp. 483-502

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654 Editorial Information /Ad Hoc reviewers/ Content 2013

Worker Tenure and Employment Heterogeneity on Software Development Work Activities Volume 10 – Número 3 – Set – Dez 2013 LEONARD, Lori N. K., The University of Tulsa, USA The Role of Worker Tenure and Employment Heterogeneity on Software Development Work Activities Volume 10 – Número 3 – Set – Dez 2013

pp. 483 – 502

LIMA, Carlos Roberto Camello, Unimep Sao Paulo, Sao Paulo, Sao Paulo, Brazil Information Technology Management System: an Analysis on Computational Model Failures for Fleet Management Volume 10 – Número 3 – Set – Dez 2013

pp. 577-596

MARQUES, Bruno Alexandre Ribeiro, Universidade Católica pp. 463-482 Portuguesa, Lisboa Portugal The Development of Value Systems and the Role of Information Systems in the Portuguese Insurance Industry Volume 10 – Número 3 – Set – Dez 2013 MORAES, Marcelo Botelho da, University of Sao Paulo, São Carlos, SP, Brazil Cash Management Policies By Evolutionary Models: A Comparison Using The MILLER-ORR Model Volume 10 – Número 3 – Set – Dez 2013

pp. 561-576

MOREIRA, José Rogério Poggio, Universidade Salvador (UNIFACS) - Bahia, Brazil IT Management Model for Financial Report Issuance and Regulatory and Legal Compliance Volume 10 – Número 3 – Set – Dez 2013

pp. 597-642

NAGANO, Marcelo Seido, University of Sao Paulo, São Carlos, SP, Brazil Cash Management Policies By Evolutionary Models: A Comparison Using The MILLER-ORR Model Volume 10 – Número 3 – Set – Dez 2013

pp. 561-576

NETO, Arthur Nunes Ferreira, , Catholic University of Brasilia, pp.519 – 538 Brasília – DF, Brazil Metamodel of the IT Governance Framework COBIT Volume 10 – Número 3 – Set – Dez 2013 NETO, João Souza, University of Brasilia– UNB, Brasília – DF, Brazil Metamodel of the IT Governance Framework COBIT Volume 10 – Número 3 – Set – Dez 2013

pp.519 – 538

OLIVEIRA, Jayr Figueiredo, da EAESP-FGV, Sao Paulo, Sao Paulo, pp. 577-596 Brazil Information Technology Management System: an Analysis on Computational Model Failures for Fleet Management Volume 10 – Número 3 – Set – Dez 2013 PEREZ, Gilberto, Universidade Presbiteriana Mackenzie, Brazil nderstanding Organizational Memory from the Integrated Management Systems (ERP)

pp. 539-560

Volume 10 – Número 3 – Set – Dez 2013 RAMOS, Isabel, Centre Algoritmi, University of Minho, Portugal Understanding Organizational Memory from the Integrated Management Systems (ERP) Volume 10 – Número 3 – Set – Dez 2013

pp. 539-560

REINHARD, Nicolau, University of São Paulo, São Paulo, Brazil The Influence of Shared Mental Models Between the CIO and the Top

pp.501-518

JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013 p.647-657

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Editorial Information /Ad Hoc reviewers/ Content 2013

655

Management Team on the Strategic Alignment of Information Systems: a Comparison Between Brazilian and US Companies Volume 10 – Número 3 – Set – Dez 2013 SILVA, Paulo Caetano da, Universidade Salvador (UNIFACS) Bahia, Brazil IT Management Model for Financial Report Issuance and Regulatory and Legal Compliance Volume 10 – Número 3 – Set – Dez 2013

pp. 597-642

SCHEEREN, Adriano Weber, Getulio Vargas Foundation, Brazil Impacts of a Relationship Model on Informational Technology Governance: An Analysis of Managerial Perceptions in Brazil Volume 10 – Número 3 – Set – Dez 2013

pp. 642-664

TAVARES, Elaine, Coppead Graduate School of Business, Brazil pp. 643-664 Impacts of a Relationship Model on Informational Technology Governance: An Analysis of Managerial Perceptions in Brazil Volume 10 – Número 3 – Set – Dez 2013

Conference Report / Relatório de Congresso RICCIO, Edson Luiz e colaboradores, Universidade de São Paulo, Brasil Resultados do 10º. CONTECSI Congresso Internacional de Gestão da Tecnologia e Sistemas de Informação / Outcomes of 10th CONTECSI – International Conference on Information Systems and Technology Management Volume 10, Número 2, Mai. - Ago., 2013 Assistant Editor / Assistente Editorial Dra. Marici C.Gramacho Sakata, (2004-presente/present) Webmaster Marcos Iriarte / Fernando Kimura TECSI Team Website/e-mail www.jistem.fea.usp.br - jistem@usp.br Indexação - Index SciELO Redalyc Doaj ProQuest Latindex CLASE Dialnet Ebsco Gale Infotrac Portal de Revistas da USP Portal de Periódicos CAPES Ulrich’s Periodical Directory ISSN online: 1807-1775 Quadrimestral/Every four months Classificação Nacional/National Classification Qualis Capes – B1 - Administração e Turismo

JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013 p.647-657

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656 Editorial Information /Ad Hoc reviewers/ Content 2013

Authors Filiation / Origem Institucional dos Autores Total

Volume 10, Number 1, JanApr 2013

Volume 10, Number 2, MayAug, 2013

University of Évora, Portugal (2) Instituto Politécnico Tomar, Portugal (1) FURB University of Blumenau, BR (1) UNINOVE University Nove de Julho,(3) UTFPR – Federal Technological University of Parana (1) UFPR - Federal University of Parana (1) FADEP – Faculty of Pato Branco (2) Catholic University of Brasília (1) Pontific Catholic University of Rio de Janeiro (2) Federal University of São João del Rei (UFSJ) (1) Goiano Federal Institute - Iporá Campus(1) Pontifical Catholic University of Goiás (1) Mackenzie Presbyterian University (2) University of São Paulo (2) Federal University of Santa Maria (3) Total University of Melbourne (1) Central University "Marta Abreu" from Las Villas (2) Layla Hasan, Zarqa University (1) Federal Institute of Education, Science and Technology of Rio Grande do Sul (2) University of Professional Studies, LegonAccra (1) Regional University of Blumenau (3) Universidad Nacional del Sur (1) Universidad del Magdalena (1) Jenny Marcela Sánchez-Torres (1) Pontifical Catholic University of Parana (4) Pontifical Catholic University of Rio Grande do Sul – PUCRS (2) University of São Paulo (5) UNESP Sao Paulo State University, Marília (1) Universidad de las Ciencias Informáticas (2) Total

Volume 10, Number 3, Sept. Dec., 2013

Universidade Católica Portuguesa (1) Lipscomb University (1) The University of Tulsa (1) Quinnipiac University (1) University of São Paulo (4) University of Brasilia – UNB (1) Catholic University of Brasilia (1)

JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013 p.647-657

Brazil

(6) SP (1) SC (4) PR (1) DF (2) RJ (1) MG (2) GO (3) RS

(4) RS (3) SC (4) PR (6) SP

(11) SP (2) DF (2) BA

www.jistem.fea.usp.br

Outside Brazil

(3) Portugal

(1)Australia (4) Cuba (1) Jordan (1) Ghana (1) Argentina (2) Colombia

(2)Portugal (3) USA

Editorial Information /Ad Hoc reviewers/ Content 2013

657

Mackenzie Presbyterian University (1) Centre Algoritmi, University of Minho (1) Getulio Vargas Foundation EAESP-FGV (3) Nove de Julho University (1) Methodist University of Piracicaba, UNIMEP (1) Salvador University, UNIFACS (2) Coppead Graduate School of Business (1) Total

JISTEM, Brazil Vol.10, No. 3, Sept/Dec. 2013 p.647-657