1

Is it being Adaptative & Cost Advantageous by using new technology?

Or

Creating market Value and Differentiation for the Business?

Andy MulhollandGlobal CTO, Capgemini

If SOA* is the answer, what’s the question?

* Service Oriented Architecture

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Some points to consider…. and hopefully answer!

• Why are ‘Services’ a recognisable ‘new’ technology wave

• Can we identify a ‘common’ thread or even market

• More importantly is there real Business value in this

• Where are the compelling circumstances

• How and where do you focus to start

• Plus a selection of popular terms;

– Architecture, SOA and SOI

– Open Standards

– Open Source

– Etc

• This not a presentation on the detail of the Technology

but on its application to Business benefits

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The puzzling disconnect between home and work

The Business Manager• What are your business ‘services’• How do they differentiate • Who are your customers and suppliers• What are your competitors doing• Your strategy to create success and ‘value’

The Home Internet User• Finding possible choices• Comparing the options• Listing favourites and registering• Checking out news• Getting better value and wider benefits

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The Next Major Transition

MAINFRAMES MINI-COMPUTERS PC

CLIENT-SERVER

INTERNET

1960 1970 1980 1990 2000 2010

SERVICE-ORIENTED

The Internet & Web moves to become Business Technology

The Service Oriented Enterprise operates using;• Software and data as services• Hardware as virtualized resources• Autonomic data sources

• Occasionally connected usage• Services that cross firewalls• But still utilizes existing legacy systems

An Intel diagram of explanation

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Times and possibilities have and are changing….. fast

• Open Standards; – a reality, developing faster, supported of by

technology industry and users

• Open Source; – a mainstream method for sharing common

software and software licence reform

• Open Convergence;

– of technology vendors and users to design

new types of interactive process flows

Five of the Ten Most Influential Players in Open Source

Source; Information Age Summer 2005

Key Standards for SOA

• Web Services Definition Language (WSDL)

• Simple Object Access Protocol (SOAP)

• Business Process Execution Language (BEPL)

• Universal Description Discovery & Integration (UDDI)

• Web Service Choreography Interface (WSCI)

• Blocks Extensible Exchange Protocol (BEEP)

• Web Services Addressing (WS-Addressing)

• Security Assertion Markup Language (SAML)

• Web Services Distributed Management (WSDM)

• Web Services Trust Language (WS-Trust))

A new technology wave?

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Bridging the disconnect using Business Service examples

Think of the Low Cost Airline vs. Traditional AirlineThe connection of the external market for seats and demand to the internal fulfilment with dynamic pricing

Horizontal integration by Process (Service Oriented) Vertical integration by Data (ERP and EAI)

Choose your own Process (Service Oriented) Be driven by their requirements (Application)

Think of Choosing on Amazon vs. a Mail Order BookshopThe ability to view pages in any order to make the process of choice and to read market comments on topics

Think of the Scalability of eBay120 million users sharing, building and changing processes as and when required with no centralised dependencies

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Service-Oriented Enterprise

Service-Oriented ApplicationsOrchestrating Software and Data as Services

Service-Oriented InfrastructureOrchestrating Virtualized Resources

Sensor TechnologyAutomating Data Collection

Service-Oriented BusinessOrchestrating Business Value through Services

ExternalInformation

External Actions

Automates datacapture

Reduces "fixed"operating cost

Improves flexibilityto "adapt"

Direct businessvalue capabilities

Collaborativeoptimization

Se

rvice

Orien

ted

Arc

hitec

ture

and

Bu

sin

es

s Pro

ces

s

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Cost to ProvideTraditional

Applications

Value Captured by

New ‘Services’

OpportunityExternallyIdentified

Cost to ProvideTraditional

Applications

Value Captured by

New ‘Services’

OpportunityExternallyIdentified

SalesProspect

MarketCompetitor

#1

Competitor #2

Comparisonbetween Back Office

Operating Costs

CompetitiveDifferentiation in

Responding to Opportunity

IT does Matter; new areas of value and differentiation

Back Office Applications for ‘Cost’ based automation versus Front Office ‘Services’ for accessing Business ‘Value’

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Different People and Reasons for adopting ‘Services’

Back Office Front Office MarketOpportunity

SalesRevenuesAnd Profit

Market

CFO and CIO

Traditional TransactionRecording Apps/ERP

Internally focussed onAutomation of Data Mgt

Cost driven using SOI

COO & Business Mgr

Business OperatingEfficiency Activities

Internal & ExternalFocus on Information

Effectiveness driven SOA

CEO and COO

Shareholder valueStrategic Positioning

Market and EcosystemCompetitive advantage

Value Driven SOE

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The ‘edge’ and ‘inter-business’ works differently

Business• Large inflexible structures• Monolithic functions• Big investments

IT and MIS• Long running Projects• Big applications ie ERP• Overall infrastructure

Business– Small agile market based units– Flexible attributed process– Small investments, quick payoffs

IT and MIS– Small self contained projects– Web Services– Shared infrastructure

Bad News BIG Good News SMALL

Business• Funded by Millions of $• Supported by big names• Extension of existing Business

model

IT and MIS• Monolithic Application centric

• i.e; CommerceOne• ASP – application service

provider

Business• Market place defined by

participants• Volume created by users• New processes created by users• To suit circumstances

IT and MIS• Web Service Architecture centric• Built in small pieces as required• Orchestration is used to support

endless dynamic change

B2B Exchanges eBay Any to Any Exchange

Internet Connected; Web Service Standardised;Enterprise Business Vision; User Services Defined

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… and its already raising many of the current challenges

Need for more flexibility• Multichannel strategies• Time to market• Mergers and de-mergers

Unsupportable Dependancies• Increasing amount of ‘spaghetti’ linkages• Too much of the budget spent on maintainance• Difficulties in staffing for support of legacy systems

Continued cost reduction plus Compliance support

Integration of Web-based channels

• Enterprise portals are no longer stand-alone • Connection to legacy systems is difficult• Online systems ‘crash’ with external visibility

Cross-functional processes• ERP systems have created new ‘silos’ • Need for adaptative processes• Increasing use of external ‘partners’

Demand for ‘New’ IT services• Collabration• Communication• Information• ‘Services’• Global Data Sync• Mobility• Messaging• ....

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Services offer four compelling reasons for implementingNumber 1 – technology costs and creating ‘Adaptive IT’

• Cost Reduction of Existing IT operationa technology driven activity of rising popularity over the last few years

– Creation of a common and shared infrastructure to reduce ‘fixed’ costs = SOI• Server Virtualisation, Storage Area Networks, …

– Delivery of a complex requirement in a more effective lower cost manner = SOA• Wide spread adoption of ‘architecture for solutions and enterprises

Web

Legacy

Logistics

ERP

SAP

PoS

Lo

gis

tic

s

We

b

SA

P

PO

S

Le

ga

cy

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Services offer four compelling reasons for implementingNumber 2 & 3 – Business Value from Market activities• Strategic Business Advantage; ‘Inside- Out’

A first movers advantage created by seizing a new market position

– The Walmart or Dell positioning at the centre of a ‘joined up ecosystem = SOE

– Creating extended processes that connect ‘Inside’ procedures to ‘Outside’ enterprises

• Tactical Business Advantage; ‘Outside –In’Responding to the impact of a first mover by joining their ecosystem

– A supplier to Dell or Walmart joining the ecosystem to gain more business

– Connecting procedures from an ‘Outside’ customer to ‘inside’ procedures

The Keystone AdvantageA Harvard Business Press Book

The Keystone supports the arch

The Foundation stone cansupports multiple arches

A Niche stone is valuedfor uniquely fitting

A Feature stone attractsAttention to the arch

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Lets get Imaginative – a car manufacturer and ‘Inside – Out’

X Motors accessories manufacturerscommunity

X Motors Manufacturing

X Motors ServiceDealer

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Select sub-processes in specific lines of business and geographies for SOE

migration, extend and integrate on a “proof-of-

return” basis

Build SOE platforms from scratch, leverage alliances and virtuality (web) to bust the process paradigms of

the industry

Stay close to the customers, change as they

change, based on a fully service oriented Process,

People & IT platform (“Totally Adaptive”)

Configure new lines of business for massive

startup on “pure” SOE platforms, interface with legacy and push change

towards the center

New Entrant

Legacy

EnterpriseMaturity

Emerging

“New player in an emerging industry”

Innovate – faster than the others

Do what they do – cheaper & better

“New player in a mature industry”

Release the new from the legacies of the old

“Established player entering an emerging industry”

Gradual replacement for cost/scale advantage

“Established player in a mature industry”

IndustryMaturity

Select sub-processes in specific lines of business

and geographies for SOE migration, extend and

integrate on a “proof-of-return” basis

Build SOE platforms from scratch, leverage

alliances and virtuality (web) to bust the process

paradigms of the industry

Stay close to the customers, change as they

change, based on a fully service oriented

Process, People & IT platform

(“Totally Adaptive”)

Configure new lines of business for massive

startup on “pure” SOE platforms, interface with

legacy and push change towards the center

“New player in an emerging industry”

Innovate – faster than the others

Do what they do – cheaper & better

“New player in a mature industry”

Release the new from the legacies of the old

“Established player entering an emerging industry”

Gradual replacement for cost/scale advantage

“Established player in a mature industry”

Services offer four compelling reasons for implementingNumber 4 – A Transformational Business Strategy

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What the IT element?

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Today‘s IT landscapes built for yesterdays‘ business processes

• History of IT landscape and current challenges

• “Hard-wired” applications/processes

• Limited flexibility

• Hurdle for growth and innovationB

us

ine

ss

IT

• High integration cost

• Speed of change

• Poor data quality

• People as “humanintegrators”

•Mainframe,legacy etc.

•Singularapplications(FI/CO, R/2)

R/3

IntranetCRM

2

CRM 1

SCM

(…)

Does the IT complexity still fit to our business needs?

• Limited businessvalue through IT

• IT only for fewclient needs

• Increasing IT interfaces& „exploding“ IT costs

• Multitude of IT vendors

• Growing business complexity• Globalization and mergers• Existing „IT-silos“ (e.g. vendors,

regional, business units)

1980s

Impact

• Create open platform

• Define „Enterprise servi-ces“as business & IT driver

• Enabled internet solutions1990s 2005

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Service-Oriented Architecture de-couples ‘glue’ that slows change

• Business architecture powered by SOA

1Transport Management System

OthersFinance & Controlling

Reporting & Planning

Purchase & Procurement

Marketing / Sales

TMS1

Damage Mgmt.

Portal / EAI / Business Process Platform

Finance, Controlling, HR & other support processes

Orderprocessing

Logistics – In- and Outbound Production Billing Quality

Mgmt.Customer

serviceMarketing &

Sales

Personnel-Order entry-Transportation Planning- Client billing- Intra-company settlement

Customs Mgmt.

Warehousing

Key Characteristics

Extraction of business scenarios

– custom composite/event

driven

Encapsulate existing systems –

loosely coupled

Flexibility

Reduced complexity (content

wise as well as timing)

Re-usability

Speed

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SOA: Business Flows into Services through Architecture

Order mgmt. Pick-up execution Pick-up depot Linehaul Delivery

depotDelivery execution

Delivery tour post-operations

Pick-up order registration

Preparation of pick-up tours

Return from pick-up

Freight plan adaptation

Preparation of tour planning

Standard delivery

Shipment preparation Pick-up Unloading Network

informationLinehaul unloading

Collection C.O.D.

Management undelivered goods

Check good/info.

Sorting of goods and information

Linehaul loading

Linehaul departure

Terminal check

Deviations management

Sorting for delivery

Tour planning

Loading vehicles

Departure of delivery tour

Terminal check

Special delivery

Unexecuted delivery

C.O.D. management

Mgmt. of operational performance

Measurement of service levels

Finance/ accounting

Master datamgmt.

Humanresources

Businessintelligence

Customerautomationsystem

Scanningequipment

Sortingequipment

Weightingmeasuring

CRM Track &trace

Customerservice

Invoicing / billing

Cost / partnersettlement

Internalsettlement

Quality mgmt.

Pricing &costing

= Outside TMS

= TMS core functionality

Procure-ment

Orderprocessing Transport planning Transport Billing Quality

mgmt.

Example

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Service-Orientation focuses on delivering unique Business Value

• Business Transformation SOE

Products/Services

Business process execution

Check customer address

Marketing systems

Sales systems

Service systems

Corporatesystems

Businesssystems

Trading Systems

Verify customer credit

Determine productavailability

Calculateshipping charges

Application/System

Service

Process

Unique Value Proposition

Encapsulated

layers create

tremendous

flexibility on

each level

Each level opens up considerable project opportunities – with distinct clients & requirements.Each level opens up considerable project opportunities – with distinct clients & requirements.

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Defining the Conceptual Business Structure for SOE

Procedures, Defined Processes, and Ad Hoc Interactions

Ad Hoc Interactions

Operational Departments(“The Rims”)

Enterprise Operations

(“Enterprise Hub”)

Enterprise Procedure (“Spokes”)

Departmental Process

1. Enterprise Operations: The “Hub” of critical corporate data management and maintenance for CxO level use, auditors, etc…

2. Enterprise Procedures: The “spokes” serve as vehicles for delivering data across the company, typically already exist via current ERP systems

3. Operational Departments: The “rim” sees many new department specific processes defined by day-to-day activities

4. Departmental Process: Essential to individual departments, they provide more value to business owners than to the Enterprise

5. Inter-Enterprise Procedures / Ad Hoc Interactions: Additional processes developed to manage daily interactions/ requirements

1

2

3

Inter- EnterpriseProcedure

Understanding the Hubs and Spokes

5

4

5

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Supporting a GTM Initiative with an SoEAI solution stack

Service OrientedEnterprise

Service OrientedArchitecture

Service OrientedInfrastructure

The Issue A compelling reason to act

The capability to provision technologyServices in a cost effective mannerTo the MIS department

The method to deliver the requirementTo the Project Manager

Delivery of Business ValueTo the Business Owner

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SOE as a business strategy

1) Insist on redefinition of the business requirementAs a series of granular tasks with a separate flow2) Restrict the ‘ownership’ to those unique tasks thatHave been defined, recognise the duplicated tasks for reuse

Service OrientedEnterprise

Service OrientedArchitecture

Service OrientedInfrastructure

The Issue

A compelling reason to act

1) Continue to apply ‘virtual’ management to shared hardwareAnd move to introducing ‘shared’ common software as well2)Introduce horizontal technology layer management with newResponsibilities, tools and management capabilities

1) Aim to extend the concept of IT ‘utility’ style sharedServices to an increasing number of shared ‘utility’ Supported business services2) Map business processes for the enterprise and defineTypes i.e. enterprise procedure, department process, etc

Move duplicated tasks down

Move common technology up

Common and sharedBusiness tasks& orchestrated

Procedures

Supplied ‘utility’Style and Bench

Marked externally

Differentiated andUnique tasks ownedAnd directly paid forBy the business unit

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How will an Enterprise adopt these new capabilities?

Externally created Value through more efficient

market interaction

Mobility Event Driven Real Innovation ………… etc

Internal Value createdthrough process

redesignInternal Cost

Reduction by shared resources

License costsavings

Linux Platform

Rationalisation Storage Area Networks Server Virtualisation Grid Computing Security

Web Services Business Intelligence Management tools Development Tools Service Orientated Architecture

b

Mobility

Processbased

Services OrientedInfrastructure

Services OrientedArchitecture

Services OrientedEnterprise

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Positioning Major Technology Vendors in SOE/SOA/SOIA technology driven exercise to understandCurrent Capabilities and Strategic Directions

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Some thoughts on major technology players positioning – SOE/SOA/SOI

Service OrientedArchitecture

Service OrientedInfrastructure

Service OrientedEnterprise

Service OrientedArchitecture

Service OrientedInfrastructure

The Issue

SUN

Cisco

IBM

HP

Intel

Microsoft

OracleSAP

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Some thoughts on major technology players positioning – SOE/SOA/SOIThe conflicting ambitions to control the SOA layer

Service OrientedArchitecture

Service OrientedInfrastructure

Service OrientedEnterprise

Service OrientedArchitecture

Service OrientedInfrastructure

The Issue

SUN

Cisco

IBM

HP

Intel

Microsoft

OracleSAP

Conflicting Ambitions

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Some thoughts on major technology players positioning - SOA Layer

The controlling‘Sweet Spot’

IBMMoving from the

Integrity of enterpriseApplications in the

data centre and Back office throughEAI towards ‘users’

And ‘services’

MicrosoftMoving from the

Integration of usersInformation byCollaboration

Towards back endApplicationintegration

SAPMoving from Enterprise

Resource Applications throughMiddleware to providing

‘Services’

OracleMoving from Enterprise

Resource Applications throughMiddleware to providing

‘Services’

ComputingServices

Inc EAI etc

Back OfficeApplicationsinc ERP etc

Front OfficeApplications

inc Desktops etc

ServicesInterconnecting

everything

SOA Middleware

MendocinoIntegrates MS & SAP

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Some thoughts on major technology players positioning – SOI layer

SOEBusiness Services

SOA Services

Orchestration

SOI Technology Services andOperationalEnablement

HPNeutral to the SOA

layer seen as ‘agnostic’by SAP, Microsoft,

Oracle, etcExtensive Horizontal

Software to optimise &Integrate all SOI resources

SOA Manager

Compliance Manager

IBMA strongly integrated

Vertical model designedTo optimise the provision

Of ‘independent’ technology enabling capabilities acrossthe SOI and the SOA layers

Including database provisioning and links to

Cisco network based ‘services’

WebSphere

Security manager

SunNeutral to the business

Services providersExtensive range of SOI &

SOA JAVA softwareAdvanced hardware based

Capabilities for high Performance computing

JES Package

Microsoft integration

Google integration

CiscoNeutral to everyone as the leading

Network provider but repositioningTo be able transport / route around

Services on the network

Services on Networks

Nokia, Google, etcVariety of relationships to

Support java based ‘smartphones’ and Internet based services