Reducing Risk or Increasing Profit? Provider Decisions in Agreement Networks

Wibke Michalk (), Lilia Filipova-Neumann (), Benjamin Blau () and Christof Weinhardt ()
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Wibke Michalk: Institute of Information Systems and Management, Karlsruhe Institute of Technology (KIT), Karlsruhe, Germany
Lilia Filipova-Neumann: Information and Process Engineering, Forschungszentrum Informatik, FZI, Karlsruhe, Germany
Benjamin Blau: Office of the CPO, SAP AG, Walldorf, Germany
Christof Weinhardt: Institute of Information Systems and Management, Karlsruhe Institute of Technology (KIT), Karlsruhe, Germany

Service Science, 2011, vol. 3, issue 3, 206-222

Abstract: The rise of Software as a Service (SaaS) composition platforms and so called Compute Clouds demonstrates the growing demand for the agile composition of Web Services. In order to facilitate the composition of services and value-creation, service providers need to collaborate. This collaboration is regulated by means of Service Level Agreements (SLAs) where the parties, the executed service as well as guarantees on the service execution are specified. This work presents the concept of Service Value Networks and Agreement Networks as the underlying legal structure. Furthermore, an approach is introduced that allows a service provider to select the risk-minimal SLA portfolio. In a further step, the approach is extended in order to allow for a tradeoff between risk and expected profit from the service execution. Finally, the computational complexity of the optimization model is discussed and solutions are proposed. [ Service Science , ISSN 2164-3962 (print), ISSN 2164-3970 (online), was published by Services Science Global (SSG) from 2009 to 2011 as issues under ISBN 978-1-4276-2090-3.]

Keywords: risk management; service value networks; service portfolio optimization; utility (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:3:y:2011:i:3:p:206-222

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