best practices in enterprise soa: customer insights and

Best Practices in Enterprise SOA: Customer Insights and ExperiencesChristian Hastedt-MarckwardtDirector Solution Marketing, SAP AGRudolf HoisIndustry Solution Management, SAP AG

Customers realizing Enterprise SOA Benefits

Enterprise SOA Governance

Governance Adoption & Experiences

Summary

© SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 3

Nothing is more powerful than an idea

whose time has come.

Victor Hugo


Customers Executing on Business Strategies and Initiatives

Openness Efficiency TransparencyAgility

ITB

usin

ess

Risk Mitigation ReliabilityFlexibility

Today’s architecture

Delete fromdatabase

Rollbackinventory

CancelShipment

CancelInvoicingAdjust

Planning

NotifySuppliers

SendNotification

Order to Cash

CancelOrder

Target architecture

Enterprise SOAEnabler of Change

Merger &acquisitions

Innovation for differentiation

Managing growth & value chain

collaboration

…

Cost reduction &Cash flow improvement

…Customer-centricity

Process improvement & automation

…


AR Clerk Cash ManagerCustomer

Invoice Review Authorize Pay Settle

Analyze

Enterprise SOA Enables a Shorter Invoice-Cash Cycle

Enabling a New Business Model GISA GmbH

Being Fit for Manageable GrowthHighly competitive marketStrong growth strategy until 2011Current process of invoice management is not adjusted to support this growth

Shorter Invoice-Cash Cycle Reduce days of sales outstanding (DSO) and improved liquidityProcess efficiency in invoice processingImprove customer service quality

Enterprise SOA Value DeliveredRapid implementation (eight weeks) built on SAP enterprise services for electronic bill presentment and payment and composition of GISA’s Web servicesSaved process cost through closer customer involvement and streamlined process Shorter invoice-cash cycle by improved customer services (Access to relevant info)Flexibility to integrate other services, third-party systems and to enhance the process


ConstituenciesMinistry

Harbor Entry

Crew Permit

...

Change in Public SectorDecreasing budgets require optimized resource allocation and usagePublic pressure to increase responsiveness to business and citizensAgility to adopt changing priorities

Self-Services for PermitsResponsiveness to citizens (e.g., ship captains gets permits faster)Scalable and adaptable process across other permit typesMore capabilities for budget allocation to increase overall service

Enterprise SOA Value DeliveredRapid transformation and reuse of processes and services (e.g., crew permit, harbor entry license, “any” permit)Automated process eliminates errors and shorten the response cyclesEnd-to-end process integration (e.g., financials) on the same platform allows to scale the usage of self-services to a significant extent (e.g., 30,000 permits/year to grow up to 200,000 permits/year

Responsive End-to-End Citizen Self-Service Ministry of Transportation and Water Management, PS

Enterprise SOA Enables Higher Responsiveness with

Self-Services


360°View

360°View

360°View

Enterprise SOA Enables a 360º Customer View

Standard Bank South Africa

Change in BankingRetail bank customer mix is more demanding while less loyalRevenue growth only by customer-oriented offerings

Enterprise SOA Value DeliveredImproved customer management (e.g., cross-selling, loyalty management through 360º view on customers)Reduced processes complexity by referring only to one central source of customer data –“one version of truth”Increased stability, adaptiveness, and control in changing banking processes

Standard Bank Is Making the DifferenceShift from a product focus to a customer centric strategyHarmonizing the needs of the customersLong-term customer relationships


Collaboration along the Value Chain Profine (Mill Products)

Change in Mill ProductsCompetitive pressure from rising markets Mergers & acquisitions multi-brand/single-channel requirementLow customer retention

Multi-Brand Supply Chain and Sales Integration

Increased deal win-rateEnhanced customer loyaltyReduced sales cycles and cost of sales for standard products

Enterprise SOA Enables Multi-Brand/Single-Channel Approach and

Extension to Supply Chain

Enterprise SOA Value DeliveredFaster time to value – implementation in less than 6 monthsFast and simple order creation, complete real-time information, and full transparency along the processesTight integration along value chain with logistics partners and wholesalers


Out-tasked (optional)

Services

3rd party devices

devices

Asset Lifecycle Mgmt

Customer

Enterprise SOA Enables Extension of the Value Chain

From Product Vendor to Solution ProviderEndress + Hauser (IM&C Industry)

Change in IM&CProduct commoditizationIP and parts piracy threatDecreased customer loyalty in the industry

Enterprise SOA Value DeliveredW@M – Web-enabled asset management of E+H and third-party devicesKeystone of E+H Strategy 2011+ to become a true solution provider~20% internal cost reduction for interface development through standardized architecture Flexible deployment options – out-tasked, customer portal, SAP® composite application

Aftermarket Service OpportunityIncrease customer loyaltyNew revenue streamsInnovative solution offering


Enterprise SOA Enables Faster Consolidation of Operations

Valero

Acquired Company

…

Bringing Acquisitions Online Faster Valero Energy (Oil and Gas)

Change in Oil and GasInvestment need in infrastructure to meet rapid growth objectivesMargin opportunity and risk due to market volatility

Shorten Acquisition CyclesFaster growth and value chain presence by mergers and acquisitionsMinimize business disruption and cost in post-merger activitiesRequirement: Shorten post-merger integration cycles for a $4 - 5 billion business from typical 12 - 24 months down to 3 months

Enterprise SOA Value DeliveredFlexibility and speed in making changes to business processes – for example, customers to obtain account information, terminal price information Business optimization and risk mitigation: accurate real-time commercial, financial, and profitability data across the value chainSystem reliability: simplification of interfaces by elimination of duplicate master data




Summary


Why SOA Governance

“In 2006, lack of working governance mechanisms in midsize to large (fewer than 50 services), post-pilot SOA projects will be the most-common reason for project failure (0.8 probability).”

“However, through 2010, the biggest barriers to SOA adoption will be non-technical issues related to inadequate governance, lack of clear value metrics, poorly defined requirements and scope, and insufficient business involvement in project prioritization and service identification. SOA governance isn’t an option — it’s an imperative.”

Paolo Malinverno, et al., Gartner, 2006


Enterprise SOA Governance Safeguard the Enterprise SOA Adoption

BusinessStrategy

Solution Planning& Operations

ITStrategy

Governance

“Governance refers to the processes that an enterprise puts in place to ensure that things are done right, where ‘right’ means in accordance with best practices, architectural principles, governmental regulations, laws, and other determining factors.SOA governance refers to the processes used to govern adoption and implementation of SOA”- Anne Thomas Manes – Burton Group -

Realizing Enterprise SOA Benefits Mitigating Business Risks

Best Practices Ensuring Re-UseAligned Change Management


Enterprise SOA Governance Safeguard the Enterprise SOA Adoption

CommunityManaging Governance

Design & Modeling MethodologyToolset & Life-Cycle Management

Service DesignPIC 0 PIC 1 GDT-

PIC PIC 3 In ESRepos.

Raw design

Decision on service cut

GDT PIC review

Final design

Imple-mentation

Organi-zation

Skill Sets Proce-dures

Governance

Product CDG

Outward CDGCAG


Readiness – Planning and Realization Services

IT StrategyRealization

Service

Enterprise SOAReference Architecture

Enterprise Services-Oriented

Modeling

SAP Business Strategy for Enterprise

SOAEnterprise SOA Value

Assessment

Enterprise SOA

Road Map

Enterprise SOA Planning Services Enterprise SOA Realization Services

Enterprise SOA Business

ProcessInnovation

Enterprise SOAPulse Check

SAPOrganizationalPlanning andGovernance

for Enterprise SOA Enterprise SOA

Implementation/PoC


Organizational Planning & Governance for Enterprise SOA

Objective of the service is to align the customer’s organization and governance processes and structure to its enterprise SOA strategy.

Enterprise SOA Center of

Excellence

… … …

… … …… …

… … ……

Enterprise SOA-aligned processes,

including governance

Enterprise SOA-aligned skill

portfolio

1. CM* starting point (CM* analysis)2. Definition of CM* goals3. Definition of interest groups4. …

Change management

plan

Transformation program

Ensure/safeguard the realization of expected benefits of an enterprise SOA strategy.


Enterprise Services Repository – ESRLifecycle Support of SOA-Based Applications

Analyzes business requirementsIdentify needed business objects, services, and viewsDiscover available enterprise services in ESR for reuseIdentify missing services for new business logic

Design and model business objects (BOs)Implement new business logicModel and build UIsCreate new services reusing existing assets and publish to ESR

Compose views by reusing implemented services and BOsCompose and orchestrate services and views to form new business process

Manage change and maintain version (governance)Monitor service execution (e.g., performance, availability, process progress, events)

Package and deploy application Configure runtime (adapt to IT landscape)Test and validate applicationExecute application

Manageability along all phases of the life cycle


Run-Time Governance via AmberPoint

Visibility into and control of heterogeneous service networks, including Java and ABAP services running on SAP NetWeaver®

SAP Process Integration

OtherService

OtherService

SAP NetWeaverPortal

SAPJ2EE

SAPABAP

SAPJ2EE

Development collaboration agreement (DCA) in place between the two companies

Out-of-the-box management capabilities for Java and ABAP Web services on SAP NetWeaver

Discover all SAP NetWeaver services (including ABAP) dynamicallyDiscover “rogue” services that might compromise system integrityManage service levelsManage errors and exceptions

Fully integrated with SAP NetWeaver PortalProvides unified view of events, warnings, runtime data, etc. from the AmberPoint management system

Agent is available today from AmberPoint


Design-Time Governance Built-In

ESR: The Enterprise Services Repository is the central repository in which service interfaces and enterprise services are modelled and the corresponding metadata is stored.

ES RepositoryDefinition of processes and servicesService metadataCentral modeling and design environment

Services RegistryYellow pages of servicesDeployment information (i.e.,

endpoint)Services managementEase of consumption: browse,

discover, and use services.

Enterprise Services

Repository

Services Registry

Governance Relevance:Which services are modeled

or implemented in the landscape?

Which services can be called up in the landscape?

Where should the respective service endpoints be

published?


Enterprise Services Repository & Model Entities

Process Components

Global Data Types

BPEL Processes

Integration Scenarios

Service Interfaces

Interface Mapping

Specification & Governance

Design

Cross component integration

Evolution from integration repository

ESR – central repository for services, process components, and business objects

Open standards

Includes registry –yellow pages

Enabled central governance

Reuse

Transparency


Partners CustomersSAP

SAP and Non-SAP Business

Functionality

Business Process Platform

Composites Applications

??

?? ?

? ???

Customer Expectations:

1. Understand the SAP SOA methodology

2. What does SAP recommend around SOA methodologies?

Service Enablement: SAP Customers View


Service Enablement: SAP View

Partners CustomersSAP

SAP Business

Functionality

Business Process Platform

Composites Applications

SAP Methodology


BPe

XEn

terp

rise

arch

itect

Select technology

Classification and

registering

Analyze process with business focus

Imaginer solution

Analyze solution Feasibility,

components, landscape

Preliminary plan

Approval

New business process request

Bus

ines

sun

it

Solution proposal

Portfolio Decision

Value-driven technology selection!

Other

https://portal.wdf.sap.corp/irj/go/km/docs/corporate_portal/WS%20PTU%20Applications/Juanjo%20curso%20Metodolog�a/docs/00%20-%20Gesti�n%20Global/GP009-Plan%20preliminar.doc



BPe

XEn

terp

rise

arch

itect

New services

Service specification

Analyze process with repository

content/functional view

Analyze process with repository

content/technical view

Preliminary plan

Repositoryfit/gap

Bus

ines

sun

it

Solution proposal

Services Portfolio decision

Enterprise SOA selected!

Solution proposal




Service cut Raw design GDT Final designEnter in ES

RepositoryImplementation

Sharing our Experience, Methodologies, and Dictionary with Customers and Partners

Global Data Types (GDT)

Service Definition Process

Architectural Guidelines& Standards Semantics/Taxonomy/Patterns

Global Data Type (SAP )

Core Data Type (CCTS )

Primitive Data Type (XSD )

11 ..*

11 ..*

1 ..*1

Iterativefeedback andimprovement

Value Delivered

Design

1. Highly reduced complexity establishing a learnable entity as a basis for new roles (e.g., repository keeper, composer)

2. Preparation for model-driven composition based on reliable interface behavior3. Foundation for customer-specific governance4. High-quality documentation based on models


How ES Community Fits in the Bigger Picture

Enterprise Service Definitions

Interface schemaService operationOther

Enterprise SOA Specifications

ES definitionsConnection protocolOther

SAP buildLicense to third party to buildContribute to industry forumsOther

SOA Best PracticesWhite paperImplementation guidelinesOther

Product CDG

Outward CDG

CAG

https://portal.wdf.sap.corp/irj/go/km/docs/corporate_portal/WS%20PTU%20Applications/Projects_1_/ESA/Media%20Library/Local%20Settings/Temp/Rar$DI00.153/Hand_Out/Enterprise%20Services%20Design%20Guide%20(external%20version).pdf




Summary


Adopting Enterprise SOA Governance

ExplorationIndividual projects,Basic design principles,Manual service portfolio management,Leveraging community for information

ConsolidationIncubators attached to projects,Modeling of services,Design-time automation,Articulating requirements

IntensifyEstablish new roles & tasks,Service harmonization process,Run-time automation,Participate in discussion groups

Strategically DeployedGovernance board,Benchmarking against best practices,Model-driven composition,Showing best practices

Step-wise adoption of enterprise SOA and its governance


Customer Example: SOA Congress Presentation

Report on SOA Adoption Early adopter of SOAAnalysis of 01/2003 – 08/2006Bespoke services development

Enterprise SOA Adoption KPIs# projects 58# business processes 72 (reuse 2,1)# integration processes 147# services 256 (reuse 2,4)# service utilizations 610

Adoption PhasesConquer & Pilot (1 year)Consolidation (2 month)Intensify (3 month)Re-use (ever after)

Customer ProfileGerman customerIndustry: Fabricated metal

Revenue 2004/2005 ~ €1,600 millionEmployees ~6000

Re-use of services30% not reused40% medium reuse30% high reuse up to 60Reuse increases greatly over time“Bright eyes” after 6 month in reuse phase


Conquer & Pilot (in 2003, duration 1 year)

- Provisioning of infrastructure

- Limited research and foundational work due to budget restrictions

- Prototypes with focus on quick wins

- Sponsoring of early projects


Intensify (3 month)– Roll out new methodology

– Usage of new methodology

– Refinement based on learning

Reuse (since)– Projects are becoming successful quickly and follow standardized process

– Keep the system stable as long as possible (safeguard investments)

– Reuse starts to pay-off and speeds up innovation

– Competence center is involved in many projects

Consolidation (2 month)– Consolidate lessons learned

– Introduction of sable basis

– Definition of roles, processes, methodology

– Decision on governance model

– Decision on documentation

Life Cycle of SOA Adoption



Accept initial investments for providing high-quality services

Utilize a repository

Establish a methodology

It’s about people

People need to understand

People need to adhere to the rules of the game

Focus on documentation

Quality of documentation needs to be higher

Availability

Actuality

To Achieve Reuse


Enterprise SOA Enables Faster Consolidation of Operations

Valero

Acquired Company

…

Bringing Acquisitions Online Faster Valero Energy (Oil and Gas)

Change in Oil and GasInvestment need in infrastructure to meet rapid growth objectivesMargin opportunity and risk due to market volatility

Shorten Acquisition CyclesFaster growth and value chain presence by mergers and acquisitionsMinimize business disruption and cost in post merger activitiesRequirement: Shorten post merger integration cycles for a $4 - 5 billion business from typical 12 - 24 months down to 3 months

Enterprise SOA Value DeliveredFlexibility and speed in making changes to business processes – for example, customers to obtain account information, terminal price information Business optimization and risk mitigation: accurate real-time commercial, financial, and profitability data across the value chainSystem reliability: simplification of interfaces by elimination of duplicate master data


AR Clerk Cash ManagerCustomer

Invoice Review Authorize Pay Settle

Analyze

Enterprise SOA Enables a Shorter Invoice-Cash Cycle

Enabling a New Business Model GISA GmbH

Being Fit for Manageable GrowthHighly competitive marketStrong growth strategy until 2011Current process of invoice management is not adjusted to support this growth

Shorter Invoice-Cash Cycle Reduce days of sales outstanding (DSO) and improved liquidityProcess efficiency in invoice processingImprove customer service quality

Enterprise SOA Value DeliveredRapid implementation (8 weeks) built on SAP enterprise services for electronic bill presentment and payment and composition of GISA’s Web servicesSaved process cost through closer customer involvement and streamlined process Shorter invoice-cash cycle by improved customer services (access to relevant info)Flexibility to integrate other services and third-party systems and to enhance the process




Summary


Key Learning from Customer Examples

The level of reuse determines financial success of SOA

Average reuse of 2,4 (depends on individual customer) is sufficient for ROI

This is because consumption of services is relatively cheap and pays off for initial investments (provisioning and learning)

This means consuming delivered services will pay off much sooner, as only learning has to be returned

A consistent and mandatory methodology is required to foster reuse

Clear concepts need to be put in place and to be kept stable to safeguard investments

Higher focus on documentation

Governance is required to ensure the methodology

To achieve value with SOA


Key Learning from Customer Examples

New skills and roles arise

Aligning people, processes, tools, design methodology, and organization

Architects as a stronghold of governance

New tools to be learned (models as a basis)

Do not implement the “latest and greatest” idea in individual projects to protect the greater total; collect them for the next version of the methodology

Governance needs to start with portfolio decisions

Clear identification of where enterprise SOA makes sense

Apply governance across the stack

Governance is an imperative for any successful enterprise SOA adoption

Reuse does not just happen. Reuse has to be planned.

To achieve value with SOA


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