Integrating value modeling and legal risk management: an IT case study

Abstract

Companies need to be able to demonstrate compliance with rules and regulations, especially start-ups who typically do not have the legal expertise to identify, assess and address legal risks of initial business ideas, nor do they have the resources to hire such expertise. Tools could help them identify and deal with legal risk at an early stage. Existing research in BPM focuses on compliance verification of a consolidated business model by checking the ability of a company to comply with the standards. The challenge is to apply a ‘continuous improvement’ by steering the business on values. Moreover, legal choices typically sit at the strategic level, and not only at the operational level. In this paper, we therefore propose an approach to handle legal risks as part of business model development. The approach makes use of Continuous Business Model Planning method, a value-driven modeling approach for strategic planning, and legal argumentation. The suitability and potential usefulness of the approach is illustrated by a study of the Kenyan court case Lipisha & BitPesa vs. Safaricom.