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Best Practices inEnterprise SOA:Customer Insights andExperiencesChristian Hastedt-MarckwardtDirector Solution Marketing, SAP AGRudolf HoisIndustry Solution Management, SAP AG
Customers realizing Enterprise SOA BenefitsEnterprise SOA GovernanceGovernance Adoption & ExperiencesSummary
Nothing is more powerful than an ideawhose time has come.Victor Hugo SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 3
BusinessCustomers Executing on Business Strategies and InitiativesMerger &acquisitionsCost reduction &Cash flow improvementProcessimprovement &automationInnovation fordifferentiation CustomercentricityAgility OpennessFlexibilityManaging growth &value chaincollaborationEfficiencyRisk MitigationCancelOrderITSendNotify NotificationSuppliers ngPlanning SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 4TransparencyReliabilityTarget architectureToday’sarchitectureOrder to CashDelete fromdatabase Enterprise SOAEnabler of Change
Enabling a New Business ModelGISA GmbHBeing Fit for Manageable Growth Highly competitive market Strong growth strategy until 2011 Current process of invoice management isnot adjusted to support this growthShorter Invoice-Cash Cycle Reduce days of sales outstanding (DSO)and improved liquidity Process efficiency in invoice processing Improve customer service qualityEnterprise SOA Enablesa Shorter Invoice-Cash CycleCustomerAR ClerkCash ManagerAnalyzeInvoiceReviewAuthorizePayEnterprise SOA Value Delivered Rapid implementation (eight weeks) built on SAP enterprise services for electronic billpresentment and payment and composition of GISA’s Web services Saved 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 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 5Settle
Responsive End-to-End Citizen Self-ServiceMinistry of Transportation and Water Management, PSChange in Public Sector Decreasing budgets require optimizedresource allocation and usage Public pressure to increaseresponsiveness to business and citizens Agility to adopt changing prioritiesSelf-Services for Permits Responsiveness to citizens (e.g., shipcaptains gets permits faster) Scalable and adaptable process acrossother permit types More capabilities for budget allocationto increase overall serviceEnterprise SOA EnablesHigher Responsiveness yCrewPermitEnterprise SOA Value Delivered Rapid transformation and reuse of processes and services (e.g., crew permit, harbor entrylicense, “any” permit) Automated process eliminates errors and shorten the response cycles End-to-end process integration (e.g., financials) on the same platform allows to scale theusage of self-services to a significant extent (e.g., 30,000 permits/year to grow up to 200,000permits/year SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 6
Standard Bank South AfricaChange in Banking Retail bank customer mix is moredemanding while less loyal Revenue growth only by customeroriented offeringsStandard Bank Is Making the Difference Shift from a product focus to a customercentric strategy Harmonizing the needs of the customers Long-term customer relationshipsEnterprise SOA Enablesa 360º Customer View360 View360 View360 ViewEnterprise SOA Value Delivered Improved customer management (e.g., cross-selling, loyalty management through 360º viewon 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 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 7
Collaboration along the Value ChainProfine (Mill Products)Change in Mill Products Competitive pressure from risingmarkets Mergers & acquisitions Æ multibrand/single-channel requirement Low customer retentionEnterprise SOA Enables MultiBrand/Single-Channel Approach andExtension to Supply ChainMulti-Brand Supply Chain andSales Integration Increased deal win-rate Enhanced customer loyalty Reduced sales cycles and cost ofsales for standard productsEnterprise SOA Value Delivered Faster time to value – implementation in less than 6 months Fast and simple order creation, complete real-time information, and fulltransparency along the processes Tight integration along value chain with logistics partners and wholesalers SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 8
From Product Vendor to Solution ProviderEndress Hauser (IM&C Industry)Change in IM&C Product commoditization IP and parts piracy threat Decreased customer loyalty in theindustryEnterprise SOA EnablesExtension of the Value ChainServicesOut-tasked(optional)Aftermarket Service Opportunity Increase customer loyalty New revenue streams Innovative solution offeringCustomerAsset LifecycleMgmtdevices3rd partydevicesEnterprise SOA Value Delivered W@M – Web-enabled asset management of E H and third-party devices Keystone of E H Strategy 2011 to become a true solution provider 20% internal cost reduction for interface development through standardizedarchitecture Flexible deployment options – out-tasked, customer portal, SAP composite application SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 9
Bringing Acquisitions Online FasterValero Energy (Oil and Gas)Change in Oil and Gas Investment need in infrastructure to meet rapidgrowth objectives Margin opportunity and risk due to marketvolatilityShorten Acquisition Cycles Faster growth and value chain presence bymergers and acquisitions Minimize business disruption and cost in postmerger activities Requirement: Shorten post-merger integrationcycles for a 4 - 5 billion business from typical12 - 24 months down to 3 monthsEnterprise SOA EnablesFaster Consolidation of OperationsValero AcquiredCompanyEnterprise SOA Value Delivered Flexibility and speed in making changes to business processes – for example, customers toobtain account information, terminal price information Business optimization and risk mitigation: accurate real-time commercial, financial, andprofitability data across the value chain System reliability: simplification of interfaces by elimination of duplicate master data SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 10
Customers realizing Enterprise SOA BenefitsEnterprise SOA GovernanceGovernance Adoption & ExperiencesSummary
Why SOA Governance“In 2006, lack of working governance mechanisms in midsize tolarge (fewer than 50 services), post-pilot SOA projects will be themost-common reason for project failure (0.8 probability).”“However, through 2010, the biggest barriers to SOA adoption willbe non-technical issues related to inadequate governance, lack ofclear value metrics, poorly defined requirements and scope, andinsufficient business involvement in project prioritization andservice identification. SOA governance isn’t an option — it’s animperative.”Paolo Malinverno, et al., Gartner, 2006 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 12
Enterprise SOA GovernanceSafeguard the Enterprise SOA AdoptionMitigating Business RisksRealizing Enterprise SOA BenefitsBusinessStrategyGovernanceSolution Planning& OperationsAligned Change ManagementITStrategyBest Practices Ensuring Re-Use“Governance refers to the processes that an enterprise puts in place to ensure that things aredone 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 - SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 13
Enterprise SOA GovernanceSafeguard the Enterprise SOA AdoptionCommunityManaging GovernanceOrganizationSkill vice DesignPIC 0PIC 1Decision onservice cutToolset & Life-Cycle Management SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 14RawdesignGDTPICGDT PICreviewPIC 3FinaldesignIn ESRepos.ImplementationDesign & Modeling Methodology
Readiness – Planning and Realization ServicesEnterprise SOA Planning ServicesEnterpriseSOAValueAssessmentSAP BusinessStrategy forEnterpriseSOAEnterpriseSOA BusinessProcessInnovationEnterprise SOAPulse CheckEnterpriseSOARoad MapEnterpriseServices-OrientedModeling SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 15Enterprise SOA RealizationServicesSAPOrganizationalPlanning andGovernancefor EnterpriseSOAEnterprise SOAReferenceArchitectureIT StrategyRealizationServiceEnterprise SOAImplementation/PoC
Organizational Planning & Governance for Enterprise SOAObjective of the service is to align the customer’s organization andgovernance processes and structure to its enterprise SOA strategy.Enterprise SOAaligned skillportfolioEnterprise SOACenter ofExcellence Transformationprogram Enterprise SOAaligned processes, including governance 1.2.3.4.ChangemanagementplanCM* starting point (CM* analysis)Definition of CM* goalsDefinition of interest groups Ensure/safeguard the realization of expected benefits of anenterprise SOA strategy. SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 16
Enterprise Services Repository – ESRLifecycle Support of SOA-Based Applications Analyzes business requirements Identify needed business objects,services, and views Discover available enterpriseservices in ESR for reuse Identify missing servicesfor new business logic Manage changeand maintain version(governance) Monitor serviceexecution (e.g.,performance, availability,process progress, events) Manageability along all phases of the life cycle Design and modelbusiness objects (BOs) Implement newbusiness logic Model and build UIs Create new servicesreusing existing assetsand publish to ESR Compose views byreusing implementedservices and BOs Compose andorchestrate servicesPackage and deploy applicationand views to formnew business processConfigure runtime (adapt to IT landscape)Test and validate applicationExecute application SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 17
Run-Time Governance via AmberPointSAP NetWeaverPortalDevelopment collaborationagreement (DCA)inOtherSAPServiceJ2EEplace between the twocompaniesOut-of-the-box management capabilities forJava and ABAP Web services on SAPNetWeaver Discover all SAP NetWeaver services (includingABAP) dynamicallySAP Process IntegrationDiscover “rogue” services that might compromisesystem integrity Manage service levels Manage errors and ServiceexceptionsOtherFully integrated with SAP NetWeaver SAPPortal SAPABAPruntimeJ2EEProvides unified view of events, warnings,data, etc. from the AmberPoint managementsystemAgent is available today from AmberPointVisibility into and control of heterogeneous service networks,including Java and ABAP services running on SAP NetWeaver SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 18
Design-Time Governance Built-InESR: The EnterpriseServices Repository isthe central repository inwhich service interfacesand enterprise servicesare modelled and thecorresponding metadatais stored.EnterpriseServicesRepositoryES Repository Governance Relevance:Which services are modeledor implemented in thelandscape?Which services can be calledup in the landscape?Where should the respectiveservice endpoints bepublished? SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 19Definition of processes andservicesService metadataCentral modeling and designenvironmentServicesRegistryServices RegistryYellow pages of servicesDeployment information (i.e.,endpoint) Services management Ease of consumption: browse,discover, and use services.
Enterprise Services Repository & Model EntitiesIntegration ScenariosProcess ComponentsReuseTransparencySpecification &GovernanceEvolution fromintegration repositoryService InterfacesGlobal Data TypesESR – centralrepository for services,process components,and business objectsOpen standardsDesignInterface MappingCross componentintegration SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 20BPEL ProcessesIncludes registry –yellow pagesEnabled centralgovernance
Service Enablement: SAP Customers nessProcessPlatformCustomer Expectations:1.SAP and Non-SAPBusinessFunctionality? SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 21? ?2.Understand the SAPSOA methodologyWhat does SAPrecommend aroundSOA methodologies?
Service Enablement: SAP onality SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 22
Portfolio DecisionValue-driven technology selectionNew businessprocess requestSolution proposalClassificationandregisteringAnalyze processwith business focusApprovalImaginer e nologyPreliminary planOther SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 23
Services Portfolio decisionEnterprise SOA selectedSolution proposalSolution proposalServicespecificationAnalyze processwith tBPeXBusinessunit! SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 24Repositoryfit/gapAnalyze processwith repositorycontent/technicalviewPreliminary planNew services
Sharing our Experience, Methodologies, and Dictionary withCustomers and PartnersService Definition ProcessService cutRaw designGDTFinal designEnterin ESRepositoryImplementationDesignIterativefeedback andimprovementGlobal Data Types (GDT)11 .*Semantics/Taxonomy/PatternsArchitectural Guidelines& StandardsGlobal DataType (SAP )1 .*1Core Data Type(CCTS )1 .*1Primitive DataType (XSD )Value Delivered1.2.3.4.Highly reduced complexity establishing a learnable entity as a basis for new roles(e.g., repository keeper, composer)Preparation for model-driven composition based on reliable interface behaviorFoundation for customer-specific governanceHigh-quality documentation based on models SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 25
How ES Community Fits in the Bigger Picture SAP build License to thirdparty to buildSOA Best Practices White paper Contribute toindustry forumsProductCDG ImplementationguidelinesCAG OtherOutwardCDG OtherEnterprise ServiceDefinitionsEnterprise SOASpecifications Interface schema ES definitions Service operation Connection protocol Other Other SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 26
Customers realizing Enterprise SOA BenefitsEnterprise SOA GovernanceGovernance Adoption & ExperiencesSummary
Adopting Enterprise SOA GovernanceStep-wise adoption of enterprise SOA andits governanceStrategicallyDeployedGovernance board,Benchmarking against bestpractices,Model-driven composition,Showing best rs attached toprojects,Modeling of services,Design-time automation,Articulating requirementsIndividual projects,Basic design principles,Manual service portfoliomanagement,Leveraging community forinformation SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 28Establish new roles & tasks,Service harmonizationprocess,Run-time automation,Participate in discussiongroups
Customer Example: SOA Congress PresentationReport on SOA Adoption Early adopter of SOA Analysis of 01/2003 – 08/2006 Bespoke services developmentAdoption Phases Conquer & Pilot Consolidation Intensify Re-use Revenue 2004/2005 1,600 million Employees 6000(1 year)(2 month)(3 month)(ever after)Enterprise SOA Adoption KPIs Customer Profile German customer Industry: Fabricated metal# projects58# business processes72 (reuse 2,1)# integration processes 147# services256 (reuse 2,4)# service utilizations610 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 29Re-use of services 30% not reused40% medium reuse30% high reuse up to 60Reuse increases greatly over time“Bright eyes” after 6 month in reusephase
Customer Example: SOA Congress Presentation Conquer & Pilot(in 2003, duration 1 year) Consolidation (2 month)– Consolidate lessons learned- Provisioning of infrastructure– Introduction of sable basis- Limited research and foundationalwork due to budget restrictions– Definition of roles, processes, methodology- Prototypes with focus on quick wins– Decision on governance model- Sponsoring of early projects– Decision on documentationLife Cycle of SOA Adoption Intensify (3 month)– Roll out new methodology– Usage of new methodology– Refinement based on learning Reuse (since)– Projects are becoming successful quicklyand follow standardized process– Keep the system stable as long aspossible (safeguard investments)– Reuse starts to pay-off and speeds upinnovation– Competence center is involved in manyprojects SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 30
Customer Example: SOA Congress PresentationTo Achieve Reuse 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 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 31
Bringing Acquisitions Online FasterValero Energy (Oil and Gas)Change in Oil and Gas Investment need in infrastructure to meet rapidgrowth objectives Margin opportunity and risk due to marketvolatilityShorten Acquisition Cycles Faster growth and value chain presence bymergers and acquisitions Minimize business disruption and cost in postmerger activities Requirement: Shorten post merger integrationcycles for a 4 - 5 billion business from typical12 - 24 months down to 3 monthsEnterprise SOA EnablesFaster Consolidation of OperationsValero AcquiredCompanyEnterprise SOA Value Delivered Flexibility and speed in making changes to business processes – for example, customers toobtain account information, terminal price information Business optimization and risk mitigation: accurate real-time commercial, financial, andprofitability data across the value chain System reliability: simplification of interfaces by elimination of duplicate master data SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 32
Enabling a New Business ModelGISA GmbHBeing Fit for Manageable Growth Highly competitive market Strong growth strategy until 2011 Current process of invoice management isnot adjusted to support this growthShorter Invoice-Cash Cycle Reduce days of sales outstanding (DSO)and improved liquidity Process efficiency in invoice processing Improve customer service qualityEnterprise SOA Enablesa Shorter Invoice-Cash CycleCustomerAR ClerkCash prise SOA Value Delivered Rapid implementation (8 weeks) built on SAP enterprise services for electronic bill presentmentand payment and composition of GISA’s Web services Saved 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 SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 33
Customers realizing Enterprise SOA BenefitsEnterprise SOA GovernanceGovernance Adoption & ExperiencesSummary
Key Learning from Customer ExamplesTo achieve value with SOA 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 offfor initial investments (provisioning and learning) This means consuming delivered services will pay off much sooner, asonly 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 safeguardinvestments Higher focus on documentation Governance is required to ensure the methodology SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 35
Key Learning from Customer ExamplesTo achieve value with SOA 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 toprotect the greater total; collect them for the next version of themethodology 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 adoptionReuse does not just happen. Reuse has to be planned. SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 36
THANK YOU FOR YOURATTENTION ! SAP AG 2007, SAPPHIRE / 1956 / Christian Hastedt-Marckwardt & Rudolf Hois / 37
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 - Re
