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Management of Virtual Organizations faces unique challenges which traditional approaches cannot address. Based on service oriented architecture, this paper proposes a performance measurement framework that aligns the work of partners in a virtual organization at three different layers. The first layer is designed for partners’ strategic alignment through coordination of the value creation network. In the second layer, five performance dimensions of partners’ collaboration are defined which can be mapped onto the service choreography model. The third layer focuses on assessing effectiveness and efficiency of partners’ domain specific services which is designed based on ITIL V3 service level management guidelines. In order to consolidate the proposed framework, these three layers are integrated using a procedure for extracting service choreography and SLA aggregation patterns from the value network. We propose an integrated solution for decentralized performance measurement without the need for a central authority. The proposed framework provides flexibility, scalability, and interoperability and enhances transparency of partners’ performance information at an agreed-upon level as a basis for mutual trust.

A Framework for Performance Measurement in Service Oriented Virtual Organizations - A Value Network Approach to Collaborative Performance Measurement