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Aiming at building up more powerful, open-standard-based and generic infrastructures for application integration, service grids address the challenges in large-scale coordinated sharing and on-demand composition of network-based application services. The related endeavors have opened up new ways of application development, deployment and integration. In connection with the new level of scale, openness and dynamism brought forward by service grids, adaptive service configuration is of essential importance to applications. This paper proposes an approach called CAFISE, which tries to better facilitate on-demand configuration and dynamic reconfiguration of service grid applications. In CAFISE, a business design and its supporting software system are considered in a coherent way, and a convergent relation, which helps to map business-level configurations to software-level configurations, is highlighted. The paper is particularly devoted to presenting and discussing the principles, reference model, modeling language and supporting application framework of CAFISE. Since practical usefulness is highly valued in the development of CAFISE, the application of the approach to a real-world scenario is also presented in the paper.