SOA -Whitepaper
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- The document discusses how senior business and technology executives can leverage business process management (BPM) and service-oriented architecture (SOA) technologies to gain a competitive advantage. - It recommends starting small by converting critical applications to a BPM/SOA model before building enterprise-wide initiatives. Focus on changing mindsets as well as technology to rapidly execute ideas. - Consider technology changes as a key factor in strategic planning. BPM and SOA can make enterprise architectures more flexible and adaptable to help organizations stay ahead of competitors and survive disruptive innovations.
SOA -Whitepaper
- 1. Leveraging BPM/SOA to gain competitive advantage – A survival guide for executive management! As a CEO, CIO or CTO what does BPM and SOA mean to you? Are you responsible for the technology strategy decisions of your organization? How do you filter out the hype and make the right investments so as to gain the crucial competitive edge in today's dynamic business environment? How do you avoid the mistakes which could render your technology strategy obsolete with the forthcoming destructive innovations?
- 2. Ghanshyam Sharma is one of the founding members of Bahwan CyberTek Inc (BCT), a 100 million dollar software products and services organization with 1200 employees and business interests across more than 20 countries worldwide. Sharma manages the products business for CUECENT line of products covering the North and South Americas. BCT's CUECENT BPMS is an industry standard BPM package providing a high quality (CMM Level V) industry standard BPM product at an affordable cost. The CUECENT line of products also includes many niche offerings for Retail Banking and Finance, e- Government, High Technology and Logistics industry and is used by hundreds of clients worldwide. Sharma has more than 12 years of experience in the high tech industry working for prestigious companies like BEA Systems and Fannie Mae. Early on he has also worked as an Associate Professor at a reputed North Indian University, teaching the Graduate Masters in Computer Applications courses such as Compiler Designing, Artificial Intelligence and Database Management. He himself holds a Masters in Computer Applications (MCA) degree from HP University and an MBA from the prestigious Columbia Business School. He can be reached for comments or advice at gsharma@bahwancybertek.com. Also please refer to www.cuecent.com for further information on CUECENT BPM products and www.bahwancybertek.com for more information about the company. About the Author This whitepaper is owned by Bahwan CyberTek Inc (BCT) and is for the sole use of BCT's employees, customers and prospects. The information contained in the document is legally protected and may not be further copied, distributed or publicly displayed without the written permission of BCT or its affiliates. Further BCT will not be responsible for any damages or harm caused to any entity, following the papers recommendations. The papers sole purpose is to educate the customers of available options and the audience is encouraged to seek professional technology strategy guidance from BCTin case they would like to implement the recommendations outlined in the paper.
- 3. Bahwan CyberTek Inc. (www.cuecent.com) 1. The Challenge 4 2. Audience 4 3. Business Strategy 4 4. Technology Perspective 5 6. Marrying business and technology – Enterprise architecture 6 7. Leveraging BPM and SOA 6 8. Jump, Run or Walk? 7 9. The Future 7 10. Recommendations 9 11. Conclusion 10 12. References 10 Table of Contents
- 4. Bahwan CyberTek Inc. (www.cuecent.com) 4 The Challenge Are you a senior business manager struggling with business profitability, earning per share and sales forecasts, gross margins, operational efficiency, and market leadership? Are you a senior technology manager dealing with reduced budgets, layoffs, impossible deadlines, retention, talent acquisition and your organizations technology leadership? If yes, what does BPM/SOA mean to you? Is it another hype which will die with time? Or is it the next revolution in technology, which may help you achieve that added advantage to overtake the competition? Are you worried that you may be under-investing or over- investing in a immature technology? Are you scared of getting caught off-guard by the next destructive innovation, which could render your entire technology strategy and business model obsolete overnight? Audience This paper is focused on senior business managers and senior technology executives, who need to make decisions about their organizations BPM and SOA strategy in the near future. Very often the literature and presentations around BPM and SOA are compiled and presented by technologists, who lack the insider perspective on how the world looks from the senior management perspective. The paper tries to connect the technology understanding of BPM/SOA with the business strategy and execution, providing executives a clear picture and recommendations for optimum decision making. The paper is also focused on technology middle managers, who form the communication bridge between the senior management layer and technology experts and must communicate with the two groups in two entirely different languages. Business Strategy If you lead a mid to large sized business, you must be quite familiar with the usual strategy formulation and execution frameworks. For most organizations the execution consistently revolves around Situation analysis, Gap Identification and Organizational Alignment circling back to Situation Analysis. To elaborate further, “Situation Analysis” helps us redefines our “Vision and Goals” as per the new market realities and “Gap Analysis” provides us the steps to be executed so as to align our organization structures, processes, culture and controls with the new vision and goals. As we execute the alignment, we go through new learning's, which feed into the next “Situation Analysis” and so the circle goes on. So the question than arises, why do so many organization never get it right? Consider the period of 1992 to 2002 when numerous well known companies like Raytheon, Goodyear, Kmart, Novell and Halliburton “Success has no autopilot” – Gordon Bethune, CEO Continental Airlines
- 5. Bahwan CyberTek Inc. (www.cuecent.com) 5 posted negative five year returns. And more recently consider what happened to General Motors, Ford, Bear Sterns, Lehman Brothers and even the most cautious and risk-averse GSE's Fannie Mae and Freddie Mac. While this paper is hardly a place to understand and resolve the consequences of credit crisis, one thing is glaringly evident in the aftermath of the crisis. Almost none of these large companies have proved to be flexible and intelligent enough to foresee the changes in their business environment, not to talk about quickly aligning themselves to leverage the situation to achieve their corporate goals. The business leaders do hold a large part of responsibility for the current mess but it is worthwhile to debate, did those business leaders have adequate tools to conduct the right “Situation Analysis” and execute the necessary “Alignment “ ? And since information technology forms the backbone of any such analysis and corrective action, the most important question for this paper would be, “Is it possible to develop an information technology backbone so as to enable the executes to steer the organizations away from such calamities in the future?” Technology Perspective Today the CTO's role has been completely transformed, from a “technology service provider” of the past to the “strategic thinker and executor” who can provide the organization the technology edge, so critical, not only to stay ahead of the competition, but also essential to survive in the ever changing business environment. In other words we can think of technology as the execution language of modern business. The question that arises is “Is our technology/business language efficient enough to provide us the necessary tools to adapt to the ever changing business environment?” To derive any meaningful conclusions, we would need to understand the link between an organizations business strategy and its technology architecture. We would further need to understand how quickly the technology architecture can morph itself to the changing business realities so as to feed up the necessary information for right decision making and support the new organization structure, processes and controls so critical for the complete organizational alignment. Marrying business and technology - Enterprise architecture Enterprise Architecture is the formal link between business strategy and technology execution, and provides a high level picture of how an organization should deploy its technology infrastructure to attain business goals. While the Enterprise Architecture discipline has tremendously helped organizations to build the necessary infrastructure for “Everything I think about is related to company's core business strategy and financials. I think about what technology is going to differentiate us in those markets. From there, I go into execution mode” – Linda Capuano, CTO Honeywell “Today's Enterprise Architecture represent the technology execution of business strategy, frozen in time; BPM and SOA can help unfreeze the Enterprise Architecture and keep it valid over a foreseeable future” – Sharma, Ghanshyam VP Products Bahwan CyberTek Inc.
- 6. business execution, the execution approaches adopted in the past, have an inherent flaw. The methodology satisfies organizations business strategy requirements, as expressed on a given time- interval, with very less options provided for the radical changes, so often required by the dynamic business environment. Further most EA implementations of the past have created “information silos”. For instance an organization may have a SAP implementation, an Oracle Financials Implementation, many J2EE applications, proprietary applications and so on. They all may have great interfaces and may be working perfectly well together as per the current Enterprise Architecture requirements, but what happens if suddenly bulk of the inter-communication requirements change ? Moreover what happens if we foresee hundreds of changes required in the inter-communication over a short time interval? Would our initial Enterprise Architecture hold? Would hundreds of changes executed over time completely corrupt our initial architecture, leaving an unmanageable mess behind? What would be the business consequence of such a development in terms of flexibility and adaptability to the ever changing business environment? Leveraging BPM and SOA As discussed above BPM/SOA technologies and methodologies can be leveraged to make our Enterprise Architecture implementation more dynamic and flexible. To explain in the simplest possible terms, implementing SOA architecture can provide you an abstraction layer, making it easy and transparent to leverage services across the enterprise. You could start on a small departmental level, implementing an enterprise Service Bus for services associated with that particular business unit. As you succeed with such projects, multiple such projects would materialize as individual departments or business units start re- architecting their existing applications or leveraging SOA to architect there new systems. As a second step these multiple ESB's could be connected building a cloud computing model, whereby all type of services can be accessed transparently through standard interfaces. As a decent number of services are in place, almost in parallel, BPM tools and products can be leveraged to build and deploy workflows, to consume these services and build innovative applications on a tremendous speed, fulfilling our strategic business requirements. Such an ever evolving architecture would provide the organization the capability to leverage any piece of information, almost instantaneously and derive any type of analytics for quick decision making. This is especially important since BPM tools typically cut down development time by anywhere between 40% and 80% depending on the case in hand. In fact thinking ahead of ourselves, the futuristic model based execution and web2.0 type tools could provide a non- technical business decision maker the capability to put together a custom application within hours and hence aid quick and critical business decisions. The service based architecture removes the focus from “Trying to implement the business requirements in a complex IT environment” to “Trying to leverage the existing and new services to provide the best solution. The shift from “How” to “What” transforms the technology division from a reactive implementer to a strategic partner, providing critical timely information and aiding decision making. Jump, Run or Walk? Typical technology strategists recommend a top-down implementation approach with a holistic Business Process Competency Center working with the Enterprise Architecture teams to develop the next generation technology infrastructure for an organization. While I find no reason to doubt such an enthusiastic move, any volume on business strategy execution would point out the fact that changes are best implemented slowly and steadily. Since implementing BPM and SOA would involve radical changes in the long run, including a new way of thinking, changes in role definitions, organization structure Bahwan CyberTek Inc. (www.cuecent.com) 6
- 7. Bahwan CyberTek Inc. (www.cuecent.com) 7 alignment etc, a safer option would be a slower bottom up approach with the big picture in mind. In the September 2008 Gartner BPM conference, when one of the speaker asked the audience to raise hands, if they had already received the intended ROI from there BPM projects, only 5% of the hands went up. With the current downturn, it is obvious that organizations will slow down there BPM initiatives pushing forward the entire technology adoption cycle by many quarters. A slower and bottom-up approach would ensure that we give our self adequate time to absorb the industry best practices as these practices emerge with increased usage and standardization of technology. The Future Any technology decisions a CTO makes need to reflect not only the industries current state but also the future direction. We would need to consider both constructive and destructive innovations and gauge their impact on our business and technology strategy, at least over next five years. While BPM and SOA have been constructive innovations, helping us leverage our existing technology investments, the recent phenomenon of “Cloud Computing” may bring in an entirely different “Destructive Innovation” to the industry. On the risk of sounding paranoid, imagine a scenario, where you have invested hundreds of millions of dollars in building your technology infrastructure, only to find out that a new competitor has access to the same or even superior technology infrastructure, at a fraction of your investment. Your business model could be rendered obsolete within days if you haven't paid attention to these developments and taken the necessary risk mitigation steps. So far BPM and SOA have been an enabling technology, which can be leveraged to implement services delivered using “Cloud Computing” model. While a few vendors do offer BPM modeling using SAAS, which is an early step towards cloud computing; just leveraging these services does not actually make you a cloud computing innovator. What would get you started on “Cloud Computing” model would be leveraging BPM and SOA to build in-premise services and try to utilize those services as in-premise cloud. As mentioned before the best approach to accomplish this is to re-architect some of your critical departmental application utilizing ESB architecture and then connecting the departmental ESB's together to form the in-premise cloud. As you gain better understanding of this new architectural approach over several years, you can stay in sync with the market innovations and immediately adapt to any revolutionary destructive turns in the technology. It is important to note that the destructive feature of clod computing is going to come from the Off- premise cloud computing models. While this does not pose an immediate threat to most large businesses with complex processes, five years down the line, the scenario may be completely different. On another note, for some aggressive adapters, this may be the greatest market opportunity of the decade, whereby they could leverage their existing IT infrastructure by opening up there services to the external entities and hence build new revenue channels. “Innovation is about shaking loose from yesterdays world so that we gain the freedom to create tomorrow” – Peter F Drucker
- 8. Bahwan CyberTek Inc. (www.cuecent.com) 8 Recommendations The recommendations below provide a general guideline on how you can leverage the current developments in SOA and BPM technologies and are aimed to help you streamline your thought process around the papers discussions lThe “Situation Analysis” step in your business strategy development should consider technology changes as a critical environmental factor deserving the same attention as market, customers, competitors, regulations and such other considerations. lIf this has not already been done, change the CTO/CIO roles from technology implementers to business strategy decision makers. While this trend is in place since a while now, it helps to formally redraft the roles and lay down the expectations. lStart small. Do not get caught up in building enterprise wide hubs, BPM competency centers and on- premise-clouds. Quickly convert a few of your critical applications to BPM/SOA architecture and build the required in-house competency. lKeep the initial implementation costs low and feel free to experiment with low cost offerings from smaller vendors. A lot is going to change in the next 3 to 5 years; you would do well to stay flexible and not bet heavily on any technology or vendor too soon. lFocus on changing the mindsets along with technology. Structure teams with representatives from business and technology from all levels of the organization. Your goal would to develop the ability to execute from idea/requirement to execution in the shortest possible time without compromising the quality of the results. lAs you succeed in initial project deployments, slowly start moving towards in-premise cloud computing model by integrating your departmental level applications. As more and more services become available for consumption, developing new application will become faster and easier. lAt this stage, a few months into your implementation, you might start thinking about building BPM competency centers, aligning the formal organization to the new roles and standardizing the processes and methodologies. lKeep a close look at technology developments and its consequences on business. Adapt quickly and leverage any improvements in model based execution and web 2.0 portal technologies. If possible forge strategic links with medium sized BPM vendors and guide them on your preferences. This will also help you stay ahead of competitor as you will have an insider perspective. lRegularly evaluate your business models viability in the face of the technology improvements. For instance if you can offer your processes to customers on a SAAS model building additional revenue generations capabilities, you would better get started before one of your competitors does so and gains the early entry advantage. Conclusion The BPM and SOA technologies provide us a golden chance to make our enterprise flexible and adaptable. If properly leveraged, these technologies may become a great asset in our drive to stay ahead of the competition. More than that building knowledge and experience on these technologies may help us to survive those destructive innovation cycles, which will render many of our competitors obsolete over the next decade.
- 9. Bahwan CyberTek Inc. (www.cuecent.com) 9 References 1. Reinventing strategy, using strategic learning to create & sustain breakthrough performance – Willie Pietersen 2. Making strategy work - Lawrence G. Hrebiniak 3. From worst to first - Gordon Bethune and Scott Huler 4. Big winners and big losers - Alfred A Marcus 5. Why the traditional CTO is history - Charles Geoly, Russell Reynolds Associates 6. EA and BPM : How to make the synergy work - Anne Lapkin, Gartner Business Process Management Summit, September 10-12, Washington DC 7. Business Process in the Cloud - Michele Cantara and Daryl Plummer, Gartner Business Process Management Summit, September 10-12, Washington DC
- 10. USA Headquarters, Boston BAHWAN CYBERTEK INC. 209, West Central Street, Natick, Massachusetts 01760, USA. Tel: +1 508 652-0001, 652-0015 Fax: +1 508 652-9781 Email: gsharma@bahwancybertek.com USA Northern Zone-New Jersey BAHWAN CYBERTEK INC. 59 Malsbury Street Robbinsville, NJ 08691 Tel: +1 609 223-0705 Mobile: +1 732 735-0296 Email: richj@bahwancybertek.com USA Southern Zone-Georgia BAHWAN CYBERTEK INC. 65 Torrey Pines Court Newnan, GA 30265 Tel: +1 770 304-8841 Mobile: +1 678 428-3761 Email: jerryr@bahwancybertek.com USA Southern Zone-Florida BAHWAN CYBERTEK INC. 12510 World Cup Lane Wellington, Florida 33414 Tel: +1 561 784-5049 Fax +1 561 784-9769 Email: stevef@bahwancybertek.com OMAN BAHWAN CYBERTEK LLC. Postal code 117, Wadi Kabir, Sultanate of Oman. Tel : (968) 24567154 Fax : (968) 24567148 Email : bct@bahwancybertek.com UAE BAHWAN CYBERTEK FZ-LLC Office No. 206, Building No. 1, Dubai Internet City, Tel: (9714) 3911850 Fax: (9714) 3911840. Email : bctfz@bahwancybertek.com INDIA - CHENNAI Bahwan CyberTek IT Park 148, Rajiv Gandhi Salai (OMR) Okkiyam Thoraipakkam Chennai - 600 096 Tel: (91) 44 43449000/39209000 Fax: (91) 44 43449222 Email: bctpl@bahwancybertek.com