Business transformation is a key executive management initiative that attempts to align the technology initiatives of a company closely with its business strategy and vision. Business transformation projects are often hampered by situations known as "business-IT gaps", which lead to failures in demonstrating the business values of IT functions and capabilities. To address this problem, we propose an innovative model-driven approach to value-centric business analysis and transformation. This new approach maps IT functions and capabilities to business performance, and facilitates the demonstration of the delivered value of IT and services. Also, the approach integrates value models with business models of processes and components to leverage the value model at different levels and phases of business transformation.