Supporting the Moderator in Business Networks
Heiko Thimm, Kathrin Thimm
Institute for Business Information Systems
University of Applied Sciences Kiel, Sokratesplatz 2, D-24149 Kiel, Germany
Karsten Boye Rasmussen
Department of Marketing and Management
University of Southern Denmark, Campusvej 55, DK-5230 Odense, Demark
Keywords: Business Process, Company Network, Collaborative Business, Collaboration Platform, Company Selection,
Cross-Company Collaboration, Moderator, Network-Actor, Partner Selection, Orchestration, Production
Network, Small or Medium Sized Enterprise, SME, Virtual Organization.
Abstract: More and more companies improve their sustainability by belonging to company networks. When a specific
inquiry is directed towards the company network required is a selection of companies that partner- up in a
mixture of supplementing or even overlapping companies to form a virtual organization. The selection of
partners is a challenging task for the network moderator and poor results - producing less value for the
participating selected companies - as well as unintelligible results - that confuse the companies - can
jeopardize the network. Therefore, we outline a web-based solution where the information technology
supports the moderator by providing not only an optimized solution of the selected companies but also
makes the management process transparent and traceable thus building a firmer future ground for the
The concept of the virtual corporation evolved
about 15 years ago (Davidow & Malone, 1992). The
virtuality is launched from company networks in
which companies come together to jointly act on the
market in a well coordinated manner by (after a
selection process) forming a suitable virtual
organization. The concepts of networking and
collaboration have been promoted as an (or the)
approach to deal with the present business
challenges especially for small and medium sized
enterprises (SMEs). Parts of the hypothesis and
theory behind this recommendation of collaboration
are based on the theory and analysis of successful
industrial clusters (Porter, 1998). Interestingly the
vehicle for stronger global awareness goes hand in
hand with regional collaboration. More recent
research on virtual organizations includes the
ECOLEAD Project (Camarinha-Matos &
Afsarmanesh, 2006) which is targeted at new
frameworks, methodologies, and tools for the
present and also the future networking practice.
Among others the preliminary results of ECOLEAD
include the concept of virtual organization breeding
environment as a sort of basic-level collaborative
environment. This environment is being especially
prepared to enable fast virtual organization creation
processes so that companies may quickly get
engaged in collaboration processes to meet business
For the coordination of such collaborative business
processes in company networks an authority has
been suggested (Harbilas et al., 2002 and Pereira-
Klen & Klen, 2005) which we refer to as (network)
moderator. The special task for the moderator is to
perform the orchestration task or the selection of
companies for building a virtual organization. The
moderator thus determines what particular subset of
companies of the network is best suited for handling
a received inquiry. This is a somewhat complicated
Thimm H., Thimm K. and Boye Rasmussen K. (2008).
PARTNER SELECTION FOR VIRTUAL ORGANIZATION - Supporting the Moderator in Business Networks.
In Proceedings of the Tenth International Conference on Enterprise Information Systems - SAIC, pages 119-126
DOI: 10.5220/0001696701190126
task as there are several constraints involved that are
directly expressed by the requestor in the inquiry
such as a price limit or a delivery deadline for a
certain product. Furthermore, less obvious extra
constraints that require deep insights into the current
economical situation as well as the collaboration
history of the network are to be considered. Due to
these constraints and also because of the fact that the
product and service offerings of the network
members may overlap, moderators are in need of
reliable and documentable support for the
orchestration task. The selection of companies can
be further complicated as the central descriptive
attributes of network members might not be limited
to existing products and offerings but also have
resources as competences and capabilities describing
the potential of the company, and furthermore
include an outspoken strategy of developing, adding,
and exploiting these potentials.
The (Electronic Business in Company
Networks) research project includes investigations
into comprehensive IT support for moderators of
company networks with a focus on the partner
selection. We intend to integrate this service into
available and forthcoming collaboration platforms
for company networks. Furthermore, the project also
includes an empirical survey with focus on ICT
readiness and networking maturity amongst SME
companies in the production industry of the KERN
region of Northern Germany and the region of
Southern Denmark. Some more practical insights for
company networks are gained by observations in
two existing company networks and with the active
involvement of two regional business development
This paper presents results of our work on the
support service for the partner selection or
orchestration task of moderators for given inquiries
coming to the company network. The service gives
the moderator the opportunity to apply dynamically
individual optimization criteria from a list of
predefined criteria. The service will use these
criteria to compute the most suitable set ("best fit")
of network members under a comprehensive
evaluation of the resources in the companies as well
as the current economical status and the
collaboration history of the network. The service is
expected to outperform even experienced
moderators because handling many simultaneous
constraints is a very complicated intellectual task.
Furthermore, the service is designed to bring more
consistency, transparency, and traceability regarding
the decision making involved in the orchestration
task. It may also serve as an analysis tool to support
the supervision of a company network.
In this article this first introductory section is
followed by a section presenting the context of the
moderator for inquiry handling in an existing
company network. The third section introduces the
object model and the building blocks for the support
service for network moderators. A system
architecture and implementation details for a first
prototype of this service are presented in section
four. Section five discusses related work while some
concluding remarks are given in section six.
In the project we have made some
observations from existing company networks in the
process of development of the support service. In the
German region we have focused on the
Produktionsnetzwerk Neumünster (Production
network) where around 30 production companies
have participated for more than six years. The rather
long time period is an indication of the success of
the network and part of the success of is believed to
be caused by the fact that the network is moderated.
Having a moderating person can be regarded as a
structural fact but it cannot be disregarded that
personal competences also bears evidence to the
success of the business network. In this case the
moderator function is filled by a well integrated and
accepted person with a large background in
production processes and technologies but also in
business management. Among the moderator
responsibilities to the production network we focus
in this article exclusively on the decision process for
selecting the most appropriate set of companies. Our
observations and discussions with the moderator and
members of the Produktionsnetzwerk Neumünster
and also other companies concerning the inquiry
handling process are summarized in the graphical
illustration of the process steps given in Figure 1.
ICEIS 2008 - International Conference on Enterprise Information Systems
Figure 1: Moderator-based inquiry handling.
An external inquiry is received (1) by the moderator
in the network. The inquiry has the form of a
potential customer order. If the inquiry refers to a
product of the company network’s standard product
offering, then a description is already available for
the moderator of the required collaborative
production process in the form of a historically
stored and retrievable description of the process. If
the request has more innovative elements the
moderator must create a corresponding new process
description. The process description then acts as the
object for the moderator's decomposition of the
request corresponding order components.
As a concrete illustrating example we assume a
company network that has specialized on passenger
seats for planes, ships, trains, and busses. In our
example the company network has received a
request for quotation from a shipyard asking for an
offer for 400 passenger seats with an integrated
infotainment system. Assume that a corresponding
process description for the production of the
requested seats within the network will be used to
specify the following six order components:
provision of metal seat frames,
provision of seat upholsteries
provision of circuit systems
provision of monitors
provision of harnesses
final assembly of seats.
These order components constitutes a specification
of the requirements (2). As the example shows, these
requirements refer to needed product parts and
production steps. Further requirements can specify
constraints concerning the network companies in the
form of preferences from the inquiring company as
to participating companies. In our example, the
inquiring shipyard might have explicitly asked that
the seat frames should be produced by a specific
company of the network. There can also be
constrains in the form of collaboration preferences
among the network companies.
Given the requirements and constraints for the
needed set of companies, the moderator orchestrates
a corresponding set of network members (3). This
orchestration activity consists of the selection of a
set of network members based on their company
products, and services and their company profile in
general. Steps two and three may be repeated several
times until the moderator is satisfied with the set
being orchestrated. Next, the selected members are
contacted by the moderator in order to coordinate (4)
their particular assignment and further details of the
collaborative fulfilment process and also the
response of the company network to the inquiring
company. This may require for the moderator to
again repeat steps two to four until all open issues
are solved and a consensus exists regarding the
response to the inquiring company. The moderator
then generates a corresponding response (e.g. offer
to a Request for Quotation) which is next delivered
(5) to the inquiring company.
The above description is based upon our
observations from the Produktionsnetzwerk
Neumünster. However, we find that an IT-based
support services may be very useful in general for
the inquiry management process in networks. In
particular, we see a strong need to support the
orchestration task for a number of reasons. First of
all, finding the most-suited set may easily over-
challenge a human moderator due to a large number
of different set alternatives based upon the big
number of participating companies in the network.
Secondly, often the members of a company network
offer not only complementing but often also
overlapping offerings. Thirdly, there is an aspect of
fairness as it is expected that business is to be
somewhat evenly distributed over all network
members. Furthermore, proper IT support may
reduce the influence of human factors on the
orchestration outcome and is expected to bring better
consistency of orchestration decisions over time,
better traceability of these decisions, and also
provide analytical possibilities for the general
management of the company network.
ments &
Set of Net-
work Mem-
2. specifies/ re-specifies
4. coordi-
and their
PARTNER SELECTION FOR VIRTUAL ORGANIZATION - Supporting the Moderator in Business Networks
Figure 2: Support service for network moderators - Object model.
The previous section motivated the support service
for moderators of company networks with focus on
the task of orchestration. Now we present some
major considerations for the design of the support
service for orchestration. The central classes and
relations of such a service are described through an
object model (Figure 2) based upon the
diagrammatic notation of the Object Modelling
Technique (Rumbaugh, 1998).
The class Network Offering represents the offering
of the company network to the Inquiry arising from
the market. The Network Offering is established
through collaboration of network members in the
production. The class Production Process models
these collaborative processes where the different
parts are modelled by the class Offering representing
both, physical products (or product parts) and
production services.
The “part-of” association reflects that the offered
products and services themselves may be composed
of Offerings. The class Company has attributes
describing the general data about the companies,
whereas the competencies, technical abilities
(capability), and offering of the companies are
modelled by separate classes. These classes are
together framed as Company Network Directory
(CND) in Figure 2.
The classes of CND capture relative static data.
However, the remaining classes of Figure 2 refer to
dynamic data that relates directly to the inquiry
handling activities of the network moderator. The
classes at the right border of Figure 2 capture data
that the moderator will have to prepare for each
inquiry. The class Collaboration Request Profile
holds administrative data about an orchestration
problem to be solved for a given inquiry. The class
Request Element represents and relates to the
products and production services (Offering). The
class Collaboration Constraint represents the set
constraints shown in Table 1.
Table 1: Collaboration Constraints (CC) for the set
orchestration task.
CC Explanation
INCLUDE Specifies a member of the network that
has to be included in the set.
EXCLUDE Specifies a member of the network that
has to be ignored for the set.
Specifies a pair of members of the
company network that must not be
considered together for the set.
The “part-of” association between class
Collaboration Request Profile and class Request
Element reflects that a Collaboration Request Profile
may be composed of many Request Elements.
Likewise, the “part-of” association between
Company Network Directory
Specified by moderator
Computed by service
ICEIS 2008 - International Conference on Enterprise Information Systems
Collaboration Request Profile and Collaboration
Constraint reflects that a Collaboration Request
Profile may involve many constraints.
The Network Actor Set and Orchestration Item (two
classes in the middle of Figure 2) represent the
orchestration result generated by a support service
for a given Collaboration Request Profile. The class
Network Actor Set captures administrative data
about the total orchestration result. The class
Orchestration Item describes an assignment of a
single company from the network to a Request
Element. As a Collaboration Request Profile may
consist of many Request Elements, a Network Actor
Set may consist of many Orchestration Items. This is
expressed by the “part-of” association between class
Network Actor Set and class Orchestration Item.
The example scenario of a company network
specialized on passenger seats introduced in Section
2, the assumed Request for Quotation for 400
passenger seats may be mapped into a Collaboration
Request Profile as given in Figure 3 below (here
presented as a sketched XML document).
Figure 3: Request Elements.
Similarly the Figure 4 shows a Network Actor Set
that might have been orchestrated for this sample
Collaboration Request Profile.
The orchestration task service will take as input a
Collaboration Request Profile and as output compute
the several possible Network Actors Sets under
consideration of the information in the Company
Network Directory. However, as the number of
alternatives will tend to be high it can easily lead to
a situation of information overload. Furthermore, the
computation of these alternatives will in itself be a
problem of magnitude due to a combinatorial
explosion. Therefore our research is also geared
towards a smarter orchestration service that will be
capable of considering optimization criteria for the
orchestration task and use these criteria to compute a
short ranked list of Network Actor Sets. This
ranking will reflect the “goodness of fit” of a
Network Actor Set with respect to given
optimization criteria. Through this approach, we
believe that the natural way moderators deal with the
orchestration task is imitated to a large degree.
Figure 4: Sample Network Actor Set.
There are several examples of optimization criteria
for the orchestration task specified in Table 2 and
many more could be given. The General Criteria
refer to key properties of single network members
that typically drive collaboration decisions in
company networks while the Collaboration-oriented
Criteria address aspects of the company network as
a whole that drive the collaboration decisions.
It should be noted, that the two examples for
collaboration-oriented criteria given above can work
in opposite directions as the company that has had
only a small profit share normally also will not have
a large amount of collaboration experience. This
exemplifies that the moderator has to be careful in
choosing from the list of optimization criteria for a
given inquiry. Through standard optimization
techniques one may compute the targeted short
ranked list of Network Actor Sets under
consideration of the chosen optimization criteria. At
the current stage of our research, we are
experimenting with a heuristic optimization scheme
(Thimm, 2007).
PARTNER SELECTION FOR VIRTUAL ORGANIZATION - Supporting the Moderator in Business Networks
Table 2: Optimization criteria for orchestration.
General Criteria
Distance Preference is given to network
members that are closest to a given
Price Preference is given to companies
that offer the lowest price for the
product and service, respectively.
Experience Preference is given to companies
with largest amount of experience
in supplying the specified Request
Preference is given to companies
that are assessed as high-quality
product suppliers.
Preference is given to network
members that are assessed as high-
quality service suppliers.
Preference is given to companies
with largest amounts of unused
production resources.
Preference is given to companies
with strongest economic power
Collaboration-Oriented Criteria
Preference is given to companies
with largest amounts of
collaboration experience.
Preference is given to companies to
which the network delivered the
smallest total amounts of profit
shares so far.
A first standalone prototype of our proposed support
service for network moderators are currently being
implementing. Figure 5 shows the general layout for
the prototype for which we apply the typical
technologies for web-based multi-tier software
architectures. That is, the prototype offers a web
browser-based front end that communicates over the
HTTP protocol with the application that runs on a
web application server.
The Collaboration Proposal Generator presents the
central component that computes Network Actor
Sets (NAS). We use the XML approach as presented
in Section 3 for a standardized data exchange
between the front-end and the application server.
The prototype is implemented based on the Java
programming language and further Java
technologies such as JSP, JSF, and JPA.
Figure 5: System architecture of prototype.
The database is logically divided into the three main
repositories shown in Figure 5. The Company
Network Directory (CND) corresponds to the CND
of our object model described in Section 3. In this
repository the companies are described in terms of
their product and service offerings and also their
competencies and technical abilities. The Set
Proposals Repository contains recorded Collabora-
tion Request Proposals and Network Actor Sets
resulting from interactive sessions of the moderator.
Data about performed collaborative processes and
business transactions that has earlier occurred in the
network are administered in the Collaboration
In Figure 6 we present the prototype GUI for the
moderator. The choices (e.g. for products and
services) in the selection boxes are dynamically
populated from queries to the database. The upper
window part contains GUI elements to describe a
Collaboration Request Profile. The Request
Elements may be specified by selecting
corresponding products and production services
from the given product list and production services
list. Collaboration constraints may be edited through
usual GUI elements for condition editing known
from other software packages. In the middle part of
the user interface the optimization criteria may be
selected from a given set of check boxes. Given this
input the generated Network Actor Sets are
presented in the lower part of the main window. The
two lists contain the proposed component products
and production services with correspondingly
assigned companies. The list box with title
“Products Assigned” contains the component
products with corresponding suppliers. The list box
with title “Production Services Assigned” contains
Collaboration Proposal Generator
Moderator GUI
Set Proposals
Company Network
Directory (CND)
CRP & optimization
AS &
ICEIS 2008 - International Conference on Enterprise Information Systems
Figure 6: Moderator GUI of prototype.
the proposed production services also with
associated supplier names.
The work here draws from other research and
concepts that have been developed for collaborative
order management in business networks (e.g.
Gizanis, 2006 and Fleisch & Österle, 2000). The
difference between these proposals and our work is
that we especially consider that complex products
may be jointly produced by several companies
together in possibly many collaboration alternatives.
We particular strive at a means that will enable
moderators to find the best alternative among all
possible choices based on explicit knowledge about
the companies and products. Such explicit
knowledge is not available in typical cooperative
order management environments. With respect to the
research area that is especially dedicated to IT
support for virtual organizations our proposed
support service is especially related to the virtual
organization creation framework developed in the
ECOLEAD project (Camarinha-Matos et al., 2005).
According to this framework the virtual creation
process consists of seven main steps. It appears that
the considerations for the first four steps (i.e. 1.
identification and characterization of collaboration
opportunity, 2. rough VO planning, 3. partners
search and selection, 4. Negotiation) are reflected in
our approach as well, whereas the remaining steps
(5. detailed VO planning, 6. contracting, 7. VO
launching) are outside of our current scope. The idea
to assess potential partners with respect to different
types of selection criteria can also be found in the
ECOLEAD project. However, to our knowledge still
so far missing is a description of how these ideas
may be combined to a corresponding support service
for VO planners. Such a corresponding solution for a
support service targeting the orchestration task in
company networks for example is presented in
(Jarimo & Salo, 2007). Often mathematical methods
are employed in these solutions (Schweinberger,
2002 and Bittencourt & Rabelo, 2005).
PARTNER SELECTION FOR VIRTUAL ORGANIZATION - Supporting the Moderator in Business Networks
A great deal of work still lies ahead in determining
correct and fruitful concepts for the description of
both offerings as well as the potentials of companies.
We will draw upon other researchers working with
ontologies and ontology construction especially
within eBusiness (Missikoff & Taglino, 2003).
Furthermore, the transformation of an incoming
inquiry by deconstruction or modularization
(Baldwin & Clark, 2000) into a production process
has not been the focus of our current version but
further support of the moderator will be welcome in
that area too.
The responsibilities of moderators of company
networks may include the inquiry management
process and, therefore, also the determination of the
best possible set of network actors to handle a given
inquiry. These actors are to be selected from the set
of all members of the company network. This task
may impose a complex orchestration problem on the
moderator for which we seek to develop a flexible
and powerful IT based support service. We address
this objective by an adaptable optimization approach
where moderators may choose optimization criteria
from a given list of predefined choices. The
optimization criteria given in this article only present
an initial proposal. We expect that many more useful
criteria can be found and integrated in our solution
which will be part of our future work. Integrating
additional optimization criteria may require to extent
our system architecture by further data repositories.
For example, an optimization that takes the
availability of production resources within the
network into account will require a further data
repository. In this repository the utilization profiles
of the companies’ production resources and
production scheduling information, respectively,
need to be available.
Before we will extend the set of available
optimization criteria, we will verify our service by
simulation experiments and through further tests
with real moderators of company networks.
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