X. Franch and P. Soffer (Eds.): CAiSE 2013 Workshops, LNBIP 148, pp. 253–263, 2013. © Springer-Verlag Berlin Heidelberg 2013 Toward Innovative Model Based Enterprise IT Outsourcing Vinay Kulkarni and Sagar Sunkle Tata Research Development and Design Center, Tata Consultancy Services 54B, Industrial Estate, Hadapsar Pune, 411013 India {vinay.vkulkarni,sagar.sunkle}@tcs.com Abstract. There are signs that cost arbitrage model of outsourcing engagement between enterprises and service providers will have to change to one based on value generation. Automation decisions taken by siloized businesses under cost arbitrage models have led to complex cost-ineffective situations. Both these situations may be addressed by an innovative business model based on product family concepts that systematically targets transactional and transformational needs of enterprises with focus on value generation using analysis and operational world views of enterprise IT systems. We motivate and elaborate such an approach. Our contributions are innovation that leads to mutual win- win situation by enabling service providers to service IT needs of multiple enterprises of same vertical and by enabling enterprises to reap value-oriented benefits with analysis and operational world views of IT systems thus serviced. Keywords: Outsourcing, Enterprise Modeling, Enterprise Architecture, Analysis, Operationalization. 1 Introduction A large portion of enterprise's operational processes are today automated through the use of IT systems. The as-is state of the enterprise is largely the result of a sequence of automation decisions each taken in specific contexts. These specific contexts come into existence due to siloized nature of businesses [1], which leads to several problems with the enterprise's IT systems such as- a) either partial or complete overlap of business functionality, b) sub-optimal design of operational processes, c) sub-optimal implementation of operational processes, d) plethora of non- interoperable technology platforms, and so on [2]. Given the tight economic environment, enterprises can stay viable only if the IT costs are reduced by a factor. This calls for a whole new approach to service the IT needs of enterprises. The present headcount based labor and cost arbitrage model through which enterprises engage with IT service providers (SPs) either for managing bottom-line or adding to the top-line seems to have ceased to provide the desired value. We believe that enterprises would want to increasingly focus on their core competencies and look for an IT SP who can be the single source catering to all transactional and transformational IT needs. Enterprises will soon start demanding outcome-based