ESA: A 2005 'Business-Savvy' Take on SOAs

During 2005, demand for SOA-savvy architects and developers is poised to explode, says leading enterprise software maker SAP. But, to enjoy a huge upside, these SOA experts will need more than Java, .NET and XML technology skills. See why SAP says F1000 firms will clamor for ESA (Enterprise Service Architecture) experts who can 'connect-the-dots' between IT assets a company's business goals.

Tags: Business, Enterprise Services, Applications, Business Processes, Architecture, ESA, SOA/web Services,

Enterprise Service Architecture unit,
In 2005, enterprise IT professionals familiar with SOA and web services tools and techniques will face a remarkable career opportunity.

The challenge for technical architects and developers to map their knowledge of SOA/web services to their company's ever-growing need to more efficiently use software to meet changing business needs.

Many IT pros have heard this before, about the tie-in between technology and business objectives. But, 2005 is a different, more exciting kind of tie-in.

This is not just about cost-cutting IT budgets. It's also about creating a more flexible architecture for business.

This new approach will let business execs leverage existing software to provide new internal and customer-facing applications. And, to provide them quicker than ever before.

Inside ESA - Where IT Delivers 'Business Value'
At SAP, we call this mapping of SOA/web services technologies to business needs an "Enterprise Services Architecture" (ESA). As we see it, ESA will enable companies to build, change, and expand business processes at a lower cost.

A fundamental premise of ESA is that there will be a technology distillation from today's complex, tightly-coupled enterprise apps landscape (assets including, apps logic, business logic, database tie-ins, executables, etc.).

What arises from this "distillation" will be the ability to for technical and business workers to focus on the delivery of a "business event" (such as "B2B purchase). These "business events" will be modeled as enterprise services, comprised of discrete enterprise services and re-assembled and delivered as "composite apps."

Once a company has these discrete, self-standing enterprise services, IT organizations in turn are empowered to more efficiently develop composite applications that support customer- or industry-specific business processes and best practices.

So, seen from the business manager, composite applications are a new, powerful way to manage asset -- They combine the functionality of multiple systems to create new business functionality in a more flexible and cost effective way for achieving competitive advantage

ESA's Technical Ability
To Map IT to Business Needs

ESAs show the power for SOA/web services skills and tools to impact a business. But ESA also show that for the architect/developer, knowing SOA/web services is not the end goal; rather, SOA/web services are necessary skills on the way to a much more powerful goal -- the ability to make technology better conform to business' goals.

We believe ESAs must meets three fundamental requirements of customers at a time when they must both cut costs and invest in growth strategies. In other words, a successful ESA will offer an IT architecture that is a blend of highly reliable and highly flexible infrastructure to make it easy (and less costly) for IT professionals to meet changing business needs.

In other words, an ESA should balance business and IT requirements. Let's take a look:

In specific, ESAs provides business value by supporting the cycle of innovation and standardization in a single environment by defining a software architecture that:
  • Enhances productivity through standardization and keeping control of business processes, (e.g. out-tasking of non-differentiating tasks);
  • Drives differentiation by designing new business processes based upon the existing infrastructure and leveraging existing functionality, and
  • Provides high flexibility for managing and adapting processes in time, to keep up with the pace of business change.

    Further, the ESA also provides technical value by allowing the IT technical staff to easily meet these business goals, using three major approaches:

    1. Leverage existing applications -- The ability to "service-enable" other applications and create flexible, end-to-end business scenarios. This can apply to existing commercial apps (such as mySAP Business Suite) or in-house applications developed and versioned over many years.

    2. Extend existing applications -- The ability to use 'tie-in' technologies to address complex business processes that enhance a company's current enterprise applications. As an example, architects/devs will use SOA/web services to refashion a customer- or partner-facing app that will flexibly combine transactional functions with business intelligence and collaboration; and

    3. Innovate processes to keep up with accelerated business change -- Uncoupling business processes from underlying apps or data logic to enable their systematic delivery. This approach would present reuseable business processes as composite applications (which in turn are built on top of enterprise services) will let business users evolve their processes faster, and for a fraction of the cost -- all without creating consolidation headaches.

    The Customer Demand for
    Business Savvy SOA/Web Services

    The Yankee Group recently (June 2004) surveyed more than 400 IT executive managers (CxOs, VPs, etc.), and found that more than three-fourths (83%) of them rated integration as an "important" or "critical" activity.

    Further, Yankee found that enterprise managers are beginning to feel comfortable with web services/SOA tools, as 92% say that they have deployed a web service with a "mission critical" aspect of their enterprise (or plan to by mid-2005).

    But perhaps the most revealing portion of Yankee's work comes when they asked enterprise execs why they were interested in SOA/Web services. Yankee found the "major drivers" for SOA/web services interest among execs are:

    (a) to create efficiencies across business processes,
    (b) address security issues and
    (c) provide new revenue opportunities.

    Also notable, Yankee's research found that business execs are so driven by these goals that they are willing to experiment with SOA/Web services is even the most mission-critical portions of their infrastructure, including -- application servers, databases and network management.

    Our own experience with customers bears of this keen interest. In many projects where we work with ESA tools and principals, we have found customers are looking to integrate existing IT assets into innovative new business processes while maintaining a level of flexibility that makes future process changes and new deployment models cost-effective.

    This composite approach allows a lot of efficiencies, including the ability to let in-house architects and developers focus on their areas of expertise, as well as allowing the easier use of offshoring and outsourcing of commodity (non-differentiating) processes. The approach also supports deploying software components in multiple ways for a more rational and cost-efficient organization of IT, both inside and outside the enterprise.

    ESA's Use Case -- Order-to-Cash:
    Turning Web Services into 'Business' Language

    Web services are now used mainly to work with specific pieces of functionality, such as a Web service to delete an order for an item from a particular system - a task that might be a single step in a larger process.

    However, the real potential of Web services lies in the context of an enterprise-wide business scenario that combines the functionality of multiple applications.

    Look at this example: From a business perspective, the command to cancel an order encompasses several business-related activities, including:
  • send a confirmation to the customer,
  • remove the order from the production plan, flag corresponding material,
  • notify the invoicing department, and
  • change the order status to "inactive."

    In our view, each of these activities can be a Web service offered from a different system or called through open Web services standards. From a business perspective, the ability to encompass the entire complex order cancellation would be represented as a Web service which we call an "enterprise service" in the context of Enterprise Services Architecture.

    Continuing with the order-cancellation example, the distillation of business events - modeled as enterprise services - from enterprise applications is a fundamental premise of Enterprise Services Architecture. Enterprise services enable IT organizations to efficiently develop composite applications that support customer- or industry-specific business processes and best practices. Composite applications combine the functionality of multiple systems to create new business functionality in a more flexible and cost effective way for achieving competitive advantage.

    For example, the order-to-cash process involves multiple applications: customer-facing applications (CRM), supplier-facing applications (SCM), and ERP systems where the order resides and where all transactions and fulfillment entities are stored.

    In this heterogeneous order-to-cash scenario, employees act as human integrators, working with many different applications, transferring information from one to the next by copying and pasting and retyping information, making process-flow decisions as needed. Communication between applications is hard-wired through brittle connections that are expensive to maintain.

    But with ESA, customers will have the option of leveraging their existing investments into nimble composite applications combining SAP and non-SAP applications. The resulting end-to-end business scenario will provide users with a role-based interface suited to their specific requirements and isolate them from the specifics of the underlying applications.

    The scenario can be changed flexibly to suit new business requirements, and underlying applications can be replaced progressively when a clear cost advantage justifies the move.

    ESA -- Rich with Opportunity in 2005
    At SAP, we so believe in this marriage of SOA/web services technology to business goals, our future platform and applications (including SAP NetWeaver, mySAP Business suite, SAP xApps and our industry solutions) are all being scoped with ESA in mind.

    In fact, SAP is driving its solutions even further to be compliant with Enterprise Services Architecture by 2007. In 2005, SAP will publish an inventory of its enterprise services, so customers and partners can use them to plan their road maps and start designing their own composite applications. In 2006, the Enterprise Services Repository will follow for partners and customers, including first enterprise services.

    We believe ESA will enable increased leverage of existing assets, extended reach into growth business scenarios, simplified ways to evolve and rationalize complex IT systems that now exist, and innovative growth strategies.

    With so much upside, SAP also believes a business-centric approach to SOA/Web services skills will pay big dividends for the IT technical pros (architects and developers) who pursue this solutions-driven approach to mastering the technologies.