event Independent Insight for Service Oriented Practice response

event Independent Insight for Service Oriented Practice response Enabling Business Flexibility David Sprott context policy www. cbdiforum. com outcome

Agenda £ £ £ £ 2 Flexibility SOA Characteristics A City Planning Model Classification Systems Standardisation, Customisation and Differentiation Policy Development Summary © 2006 CBDI Forum Ltd

Adaptability, Flexibility, Agility? £ £ Since 11 September 2001 the world is a risky place Unexpected events can make a mockery of people's plans Economist Risk Survey 2004 £ 3 Speed of execution on strategy and innovation Fifty-four percent of companies are shifting their focus to innovative business models rather than new products to achieve competitive advantage Economist Intelligence Unit 2005 The (Basel Compliance) rules are due to change Such a complicated set of rules is almost sure to throw up unintended consequences that no one has yet spotted The Economist International Banking Survey © 2006 CBDI Forum Ltd

£ £ £ Project architecture Tactical, LOB projects Little or no investment = £ £ £ Duplication Inconsistency (rules, data, process) Increased dependency Increased cost Very limited adaptability © Richard Turpin / Royal Geographical Society 4 © 2006 CBDI Forum Ltd

SOA Characteristics Consuming Solutions Loose Coupling Enabling rapid Process Integration & Optimisation Y Z Modularity Componentisation and encapsulation of functionality Functional standardisation Reuse to reduce cost and deliver consistency across different solutions Abstraction Virtualisation of Who, What and Where X Differentiation Consumer (solution) flexibility using alternative and/or specialist services Capability A B A Capability B C Usage decisions determined by Policy Differentiation Supplier flexibility Use alternative and consolidated resources Functional Capabilities/Resources 5 © 2006 CBDI Forum Ltd

SOA Governance Consuming Solutions Loose Coupling Formality of service specification Y X Differentiation Architecture for specialisation Z Modularity Component integrity Functional standardisation Use of standard functionality in right context Abstraction Delivery of implementation independence Capability A B A Capability B C Usage decisions determined by Policy Differentiation Testing and change management Supplier architecture Functional Capabilities/Resources 6 © 2006 CBDI Forum Ltd

City Planning Model £ £ £ Shared common services £ Roads, waste disposal, power, water, district heating. . . Shared common policies £ Planning guidelines, interface specifications. . . Enabling local solutions £ Office buildings, shops, residential homes, private access roads. . . £ Distributed, independent, constantly changing Objective is to establish minimum necessary level of standardisation that will maintain integrity and enable high level of adaptability 7 © 2006 CBDI Forum Ltd

Planning Contexts Enterprise & Solution Architecture Business Capability Orders Service Products Service Accounts Receivable API Domain Policy Service 8 Classification and Policy System Business Differentiation © 2006 CBDI Forum Ltd

The Business Activity Grid Core Activities Non-Core Activities engage your resources Mission Critical DIFFERENTIATE retain full control of Activities so maintain control Supporting Activities you can benefit by entrusting to others disengage STANDARDISE unique solutions enable flexibility perform activity in industry-standard way, to industry-standard quality INNOVATE OUTSOURCE enable change and variation in new activities; may involve partnering or CONTRACT Outsource to retain control over outcome; Contract out where less control is OK Inspired by Living on the Fault Line, and Dealing With Darwin, by Geoffrey A Moore 9 © 2006 CBDI Forum Ltd

The Business Activity Grid Use standard software solutions and services wherever Build own software solutions possible but may use standard services within. Core Activities Non-Core Activities engage your resources disengage Systems must enable change, evolution and Mission Critical DIFFERENTIATE STANDARDISE variation perform activity in retain full control of Activities so maintain control Supporting Activities you can benefit by entrusting to others unique solutions enable flexibility industry-standard way, to industry-standard quality INNOVATE OUTSOURCE enable change and variation in new activities; may involve partnering or CONTRACT Outsource to retain control over outcome; Contract out where less control is OK Excellent control systems needed when outsourcing Inspired by Living on the Fault Line, and Dealing With Darwin, by Geoffrey A Moore 10 © 2006 CBDI Forum Ltd

Relate to SOA Policy £ £ 11 Focus resources on the core activity £ Architect for agility £ Share what delivers value £ Create the environment for innovation Manage and/or redirect resources on non-core activity: £ Use commodity services and components £ Mandate shared use in standard form – at some level of the architecture - in specified contexts 20% Core Activities? 80% Non-Core Activities? © 2006 CBDI Forum Ltd

Sourced: FEA Consolidated Reference Model Document http: //www. whitehouse. gov/omb/egov/documents/CRM. PDF US Federal Architecture – Business Reference Model 12 Domains Service Types Example Resources (Services) Customer Relationship Management Customer Preferences Customer Initiated Assistance Call Center Management, Customer Analytics, Sales and Marketing, Product Management, Brand Management Support, Customer / Account Management, Contact and Profile Management, Partner Relationship Management, Customer Feedback Surveys, Personalisation, Subscriptions, Alerts and Notifications; Online Help Tutorials, Self-Service, Reservations / Registration, Multi-Lingual Support, Assistance Request, Scheduling Tracking and Workflow Routing and Scheduling Process Tracking, Case Management, Conflict Resolution, Inbound Correspondence Management, Outbound Correspondence Management Business Management Services Management of Process Organisational Management Investment Management Supply Chain Management Change Management, Configuration Management, Requirements Management, Program / Project Management, Governance / Policy Management, Quality Management, Business Rule Management, Risk Management, Workgroup / Groupware, Network Management, Strategic Planning & Management, Portfolio Management, Performance Management, Procurement, Sourcing Management, Inventory Management, Catalog Management, Ordering / Purchasing, Invoice /Requisition Tracking and Approval, Storefront / Shopping Cart, Warehouse Management, Returns Management, Logistics and Transportation Digital Asset Services Content Management Document Management Knowledge Management Records Management Content Authoring, Content Review and Approval, Tagging and Aggregation, Content Publishing and Delivery, Syndication Management, Document Imaging and OCR, Document Referencing, Document Revisions, Library / Storage, Document Review and Approval, Document Conversion, Indexing, Classification, Information Retrieval, Information Mapping / Taxonomy, Information Sharing, Categorisation, Knowledge Engineering, Knowledge Capture, Knowledge Distribution and Delivery, Smart Documents Record Linking / Association, Document Classification, Document Retirement, Digital Rights Management Business Analytical Services Analysis and Statistics Visualisation, Knowledge Discovery, Business Intelligence, Reporting Mathematical, Structural / Thermal, Radiological, Forensics, Graphing / Charting/Imagery Multimedia, Mapping / Geospatial / Elevation /GPS, CAD, Data Mining, Modeling, Simulation, Demand Forecasting / Mgmt, Balanced Scorecard, Decision Support and Planning, Ad Hoc, Standardised / Canned, OLAP Data Management Human Resources Financial Management Asset / Materials Management Development and Integration Human Capital / Workforce Data Exchange, Data Mart, Data Warehouse, Meta Data Mgt, Data Cleansing, Extraction and Transformation, Loading and Archiving, Data Recovery, Data Classification, Recruiting, Resume Mgt, Career Development and Retention, Time Reporting, Awards Mgt, Benefit Mgt, Retirement Mgt, Personnel Admin, Education / Training, Travel Mgt, Billing and Accounting, Credit / Charge, Expense Mgt, Payroll, Payment / Settlement, Debt Collection, Revenue Mgt, Internal Controls, Auditing, Activity-Based Mgt, Currency Translation, Property / Asset Mgt, Asset Cataloging / Identification, Asset Transfer, Allocation, and Maintenance, Facilities Mgt, Computers / Automation Mgt, Legacy Integration, EAI, Data Integration, Instrumentation and Testing, Software Development, Resource Planning and Allocation, Skills Mgt, Workforce Directory / Locator, Team / Org Mgt, Contingent Workforce Mgt, Workforce Acquisition /Optimisation Security Management © 2006 CBDI Forum Identification and Authentication, Access Control, Encryption, Intrusion Detection, Verification, Digital Signature, Ltd Customer Services Process Automation Back Office Services Support

US Federal Architecture – Business Reference Model Domains Service Types Example Resources (Services) Customer Relationship Services Management Customer Preferences Customer Initiated Assistance Call Center Management, Customer Analytics, Sa Management Support, Customer / Account Mana Relationship Management, Customer Feedback S Notifications; Online Help Tutorials, Self-Service, Assistance Request, Scheduling Process Tracking and Workflow Automation Routing and Scheduling Process Tracking, Case Management, Conflict Re Outbound Correspondence Management Business Management of Process Management Organisational Services Management Investment Management Supply Chain Management Digital Asset Content Management Services Document Management Knowledge Management Records Management 13 Change Management, Configuration Management, Governance / Policy Management, Risk Management, Workgroup / Gr Planning & Mgmt, Portfolio Management, Perform Management, Inventory management, Catalog M /Requisition Tracking and Approval, Storefront / S Returns Management, Logistics and Transportatio Examples of Content Authoring, Content Review and Approval horizontal and Delivery, Syndication Management, Documen utility services Document Revisions, Library / Storage, Documen Indexing, Classification, Information Retrieval, Inf Sharing, Categorisation, Knowledge Engineering, Delivery, Smart Documents Record Linking / Asso © 2006 CBDI Forum Ltd

Service Classification - Layers Order System Product Dev System Order Fulfillment Service Orders Service Stock Management Service (from legacy Accounting System) 14 Address Reformatter Process Services (orchestration layer) Stock Movements Service Products Service Stock Reordering Customers Service Accounts Receivable API Solution Layer (presentation and dialog) Stock Control Application Purchasing (from highly generic component) Currency Conversion Service Core Business Services ('backbone' layer) Underlying Services (that need a façade) Utility Services (high reuse layer) © 2006 CBDI Forum Ltd

Service Classification - Purpose Orchestrate operations from many core business operations Support process unique processing Store process level information Provide consistent view of corporate data and business rules Provides a 360° view of the resource Stores a record of each instance of each business type Applies common validation and business rules Exploit pre-existing functionality for wider reuse Aggregate functionality from pre-existing systems 15 The most reusable/shareable services Services that perform widely used sub-routines, operations Solution Layer (presentation and dialog) Process Services (orchestration layer) Core Business Services ('backbone' layer) Underlying Services (that need a façade) Utility Services (high reuse layer) © 2006 CBDI Forum Ltd

Service Classification – Basis for Standardisation and Customisation Policy Orchestrate operations from many core business operations Support process unique processing Store process level information Increasing Customisation Provide consistent view of corporate data and business rules Provide a 360° view of the resource Store a record of each instance of each business type Apply common validation and business rules Exploit pre-existing functionality for wider reuse Aggregate functionality from pre-existing systems 16 The most reusable/shareable services Services that perform widely used sub-routines, operations Increasing Commoditisation © 2006 CBDI Forum Ltd

Product Assembly Based Strategy Finished Product Pick Exterior Colour ? Pick Interior Colour Pick Wheel Style £ ? ? £ Standard GT Spec Label £ Base Product £ £ 17 Employ base products designed to be customised for individual customer / process requirements Engineer for faster delivery of finished product Enable concurrent delivery for multiple customers Maintains integrity of base product Uses range of assembly techniques to customise © 2006 CBDI Forum Ltd

Techniques Enabling Customisation At Run-Time Service Generalisation Work via Portal User Procedure Variation Key Value Pairs Concept Generalisation Process Services (orchestration layer) Business Rules Engine Metadata Look –up Core Business Services ('backbone' layer) WS-Policy Variation Event Subscribing Generic Core Business Service Underlying Services (that need a façade) Utility Services (high reuse layer) 18 © 2006 CBDI Forum Ltd

Techniques Enabling Customisation at Design Time Solution Variants BPEL Engine Service Generalisation Process Services (orchestration layer) Concept Generalisation Process Services Façade Service Layering and Sharing Work-flow Engine Web Services Offering Own UI Operation Extension Key Value Alternative Pairs Implementing Differentiated Service Switching Core Business Services ('backbone' layer) Underlying Services (that need a façade) Utility Services (high reuse layer) 19 © 2006 CBDI Forum Ltd

Levels of Service Standardisation Enterprise Sharing for cost reduction and consistency across systems Ecosystem External Proprietary Enabling B 2 B, STP, RTE May be forced by dominant partner Conflicting ecosystems creates duplication Compliance cost may be high Industry External and Internal Open Standard implementations available Commoditisation Compliance cost can be low Regulatory 20 Internal Proprietary External and Internal Open Standard Compliance is monitored, tested by external agencies © 2006 CBDI Forum Ltd

Standardisation and Differentiation Business Solutions & Business Processes Differentiated Usage £ £ £ Economic basis for flexibility, competitive differentiation and standardisation Manage solution usage on basis of competitive differentiation Manage sourcing on basis of economics Standardised Usage Custom Commodity Services Custom Services 21 © 2006 CBDI Forum Ltd

Governance Reference Architectures Business Requirements Processes 22 People © 2006 CBDI Forum Ltd

Summary £ £ Standardisation is function of industry and organisational maturity railway gauges, clothing sizes, building industry guidelines £ Requirement for blend of standard, differentiated standard and custom functionality £ 23 Unconstrained change or flexibility is undesirable creating duplication, inconsistency, complexity and cost Flexibility comes from: £ reduction in effort through reuse of standard services and components £ governance over architectural integrity maintaining core SOA characteristics of loose coupling, standardisation, modularity, abstraction and differentiation © 2006 CBDI Forum Ltd

Related CBDI Research £ £ £ 24 Practical Service Specification and Design Part 1: Planning the Services http: //www. cbdiforum. com/secure/interact/200503/Practical_Service_Spec. php SOA Governance in the Life Cycle http: //www. cbdiforum. com/secure/interact/200511/SOA_Governance_in_life_cycle. php Enterprise Framework for SOA http: //www. cbdiforum. com/secure/interact/2005 -03/ent_frame_soa. php © 2006 CBDI Forum Ltd

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