BPM / SOA Community Insights

BPM and SOA: Connected for Business Optimization

In October, the SOA Consortium announced the successful completion of its mission as well as plans to merge with the BPM Consortium.  Since January, the organizations have been working together to formalize the merged consortium’s mission, goals and objectives, identify some early projects, plan the March Symposium, and combine web properties. 

In this post, I want to share the newly combined BPM / SOA Consortium’s mission, goals and objectives.  But first, the context. 

Who is the BPM / SOA Consortium? 

The BPM / SOA Consortium is an advocacy group comprised of practitioners, service providers and technology vendors dedicated to promoting the business value, and enabling the successful adoption, of Business Process Management (BPM) and Service Oriented Architecture (SOA) by the Global 1000, major government agencies and midmarket businesses.

The BPM / SOA Consortium is a practice area community under the Business Ecology^TM Initiative (BEI).  BEI provides education, advocacy and member programs to enable organizations to achieve Business Ecology success, employ Actionable Architecture^TM, and carve a path to business-IT integration.

Business Ecology is a business-technology imperative focused on streamlining business processes, removing waste from technology portfolios, and adjusting resource consumption, to optimize business operations and foster business innovation.

The BPM / SOA Consortium is a newly expanded community, connecting the members and sponsors of the SOA and BPM Consortiums, to focus on business optimization.

Why did the BPM & SOA Consortiums merge?

The 2010 merger of the SOA and BPM Consortiums is based on the following premises:

• When the SOA Consortium began, Service Oriented Architecture was more of a fringe methodology that only a few organizations were doing with any great success, rather than an accepted part of an overall business strategy. Three years later, corporations large and small use the principles of SOA to enhance their overall business and technology strategies.
• A well-implemented Service Oriented Architecture leads to streamlined technology portfolios, improved resource sharing, better defined business capabilities, and ease of capability introduction or change.
• A well-implemented Business Process Management initiative leads to greater business agility, faster productivity and improved customer interactions for all stakeholders.
• The combined use of Service Oriented Architecture and Business Process Management results in an optimized business environment that is change-friendly, and poised for business innovation.
• Business and information technology professionals must collaborate to realize the highest yielding benefits of Business Process Management and Service Oriented Architecture.
• Enterprise and government practitioners would benefit greatly from a vibrant practitioner community to exchange insights on use cases, challenges and techniques, related to Service Oriented Architecture and Business Process Management, used individually, or combined.
• Business Process Management and Service Oriented Architecture, individually and combined, enable Business Ecology.

And now, the go forward organization.

BPM / SOA Consortium Mission

Promote the value and adoption of Business Process Management and Service Oriented Architecture as a means for organizations to optimize business operations, increase agility and streamline portfolios.

BPM / SOA Consortium Goals

The BPM / SOA Consortium is working to achieve the following goals by 2013, that:

• 75% of the Global 1000 and 50% of mid-sized businesses combine Business Process Management and Service Oriented Architecture to optimize business operations, streamline portfolios, and create a change-friendly business-technology environment.
• 75% of Major Government Agencies combine Business Process Management and Service Oriented Architecture to optimize mission operations, streamline portfolios, and create a change-friendly business-technology environment.

BPM / SOA Consortium Objectives:

• Shift the conversation from competing strategies to combined business value (business optimization)
• Provide education on business analysis, process design, governance, performance measurement and implementation techniques to combine Service Oriented Architecture and Business Process Management for business optimization
• Showcase Business Process Management and Service Oriented Architecture success stories, benefit realization, best practices and lessons learned
• Raise the Business IQ of information technology professionals and Tech-Savvy of business professionals to realize the greatest business value from Business Process Management, Service Oriented Architecture and business-technology
• Create a vibrant practitioner community for the exchange of insights on use cases, challenges and techniques, which will assist in value attainment, and spur broader, industry-wide Service Oriented Architecture and Business Process Management adoption.

Visit our website to learn about BPM / SOA Consortium membership and sponsorship.  Check out the agenda for our upcoming public symposium in Jacksonville Florida.

What are real people doing with SOA?

A frequent question to the SOA Consortium is “What are real people doing with SOA?”.  Sure, folks see and appreciate the winning case studies.  But, what about the “every organization”.  What problems, or opportunities, are being resolved using a SOA approach?  What’s the best place to start?  Top-down from business strategy?  Bottoms-up from IT projects? Somewhere in the middle? 

This is best answered in three parts, starting by level-setting on business-driven SOA. 

By “business-driven SOA”, we mean three things:

1. Creating a portfolio of services that represent capabilities offered by, or required of, your organization.  Those capabilities may represent business, information, or technology concepts.

2. Composing, or orchestrating, those services along with events, rules and policies, into business processes and solutions that fulfill business scenarios.

3. Never proceed without a business outcome in mind.  That “business outcome” could be cost and complexity reduction via a rationalized IT portfolio.  In other words, “business-driven” doesn’t require a business person tapping you on the shoulder, it means executing for business reasons.

Next, our take on “SOA initiatives”, which is, there shouldn’t be any.  Rather, there should only be business initiatives that (when appropriate) use a SOA approach.  Sure, it sounds like semantic nit-picking, but in actuality it’s a lesson from the trenches.  Focus on the business problem, not the SOA grand challenge. 

As you know, business initiatives can arise from strategic decisions, business architecture/design decisions, and/or operational results.  And since SOA can be applied to a variety of business situations, it only makes sense that SOA can appear at point, from strategy to operations.  In other words, there is no best starting point, only the best starting point for you.

As these business initiatives are further refined in planning and execution, business and implementation details are surfaced, which also may call for a SOA approach.  For example, Joint Business and IT Planning activities may surface common process, function and/or information needs, across projects.  These are potential drivers for a SOA approach.

This business and IT activity continuum is expressed by the blue, green and yellow boxes, and grey arrows and boundaries, in the diagram below.  While blue represents business activities, and yellow represents IT activities, we’ve learned that the most successful organizations spend their time in the green, where business and IT continuously collaborate.

Finally, the business scenarios.  Referring to the diagram below, in each column of the continuum, we’ve listed real world SOA approach drivers.  For example, strategic business initiatives that have benefited from a SOA approach include introducing new business capability, entering a new or adjacent market, integrating mergers and acquisitions, and introducing multi-channel strategies. 

We captured these drivers during interactions with practitioners (real people) over the last three years.  These interactions included our executive summit series, our community of practice discussions, invited speakers at our events, case study contest submissions, and the thousands of practitioners we’ve met via industry events, private forums, and in their conference rooms.

SOA Approach Drivers Diagram, October 2009 version

[Click on diagram to enlarge]

SOA Case Study Contest Winner: Cisco Systems IT for Commerce Transformation

Moments ago, we announced that Cisco Systems IT won top honors in the SOA Consortium | CIO magazine case study contest.  Highlights from the Cisco IT Case follow. 

Company Background

Cisco Systems, Inc. designs, manufactures and sells hardware, software and services to create Internet and networked based solutions.

Business Scenario

Inconsistent, Disconnected Business Processes: Cisco’s legacy infrastructure had more than 400 diverse applications, many of which supported products and services that had been developed and acquired over the years. Consequently, several core business processes such as product ordering and pricing were becoming inconsistent, monolithic, complex, and inflexible to change. A lack of comprehensive end-to-end monitoring was also a concern.

Disjointed Customer Experience: While customers could initiate nearly all their orders electronically, most still required employee assistance for completion. Customers also had to use multiple online applications. The overall customer experience was far from unified, essentially impeding the flow of company revenue. Numerous initiatives were underway to improve the situation, further complicating the process.

Quest for Unified Customer Experience: Cisco wanted to create a consistent, unified ordering experience for users of its online commerce applications. Ideally, customers, partners, and sales representatives could visit a single Cisco site to securely register an opportunity, configure products, place and track orders, renew maintenance agreements, or evaluate leasing options, all from a unified interface. Cisco also wanted to improve operational efficiency by reducing the number of online transactions that required human intervention.

Commerce Transformation Initiative: The aptly named “Commerce Transformation” initiative is based on SOA principles that have allowed Cisco IT to create a solid architectural and technology foundation for both existing and future application development. Commerce Transformation was chosen as a key proof point for SOA adoption for several reasons. Support for large business priorities was driving significant IT application investment. Numerous business capabilities were identified that would be ideal as reusable services - and the IT organization was ready to embrace SOA principles. Cisco also wanted to achieve differentiated business capabilities to maintain its leading market position.

Early Use Case: Since most of Cisco’s revenues come through partner channels, one of the first projects developed within the Commerce Transformation initiative was the Partner Deal Registration (PDR) application. Before PDR was developed, application access to business services such as pricing and configuration resided behind Cisco’s firewall. This required Cisco employees to manually help partners integrate these services into their systems, prolonging deal cycle times.

PDR was designed to give partners secure access to Cisco pricing concessions and programs, leveraging reusable enterprise-class business services such as corporate pricing, configuration, and partner profiles that were coupled with flexible business rules for price lists, contractual discounts, and promotions, among others. Existing functionality such as pricing could be wrapped into a reusable business service that partners could easily incorporate into their own processes. Granular services could then be combined to provide composite services, with the ultimate goal of an agile Business Process Management (BPM) implementation. The expectation was that developers could effectively combine services to quickly offer new value-added capabilities.

At the same time, this approach would ensure that key business services were available consistently and securely across the enterprise and would simplify their incorporation into partner commerce portals.

ROI

The Commerce Transformation initiative is already delivering scalable solutions, enhancing customers’ experiences, and providing the partner ecosystem with secure access to business services like pricing, promotions and configuration tools. It also allows Cisco to more easily and cost-effectively support new business models and enter new markets.

The solution leverages reusable enterprise-class business services such as corporate pricing, configuration, and partner profiles, coupled with business rules such as price lists, contractual discounts, and promotions.

Key benefits achieved from the PDR project:

• Improved process agility: The way quotes are priced can be rapidly changed, enabling processes such as stacking discounts and promotions.
• Growth: There has been steady growth in the number of partners, deals, and bookings. Six months after initial project rollout, the system had more than 9,000 partner users worldwide and had processed 37,000 deals worth $1.2 billion. Nearly a year later in June 2009, there were close to 20,000 partner users, and 56,000 deals worth $3.92 billion net had been processed.
• Productivity: Deal cycle time has been reduced by 50 percent, allowing sales representatives to focus on providing customers with value-add solutions and services. The volume of time consuming non-standard deals has shrunk by using upfront pricing and incentives. Since the project’s pilot rollout in September 2007, the company has realized estimated savings of $12.7 million through improvements in discounting trends and reductions in non-standard pricing. More than 18,000 man-hours of productivity have been gained by eliminating unnecessary administrative tasks for field sales team members.
• Detailed tracking: A SOA dashboard provides deep visibility into service usage and delivers data that enables service architects to continually improve services.
• Improved customer experience: The number of clicks and time to place an order have been reduced. Users receive consistently correct pricing regardless of quoting or ordering process, making it easier to conduct business with Cisco. Pricing functionality can be smoothly integrated into partner systems.
• Increased back-end efficiency: Almost 70 percent of quotes are processed with no human intervention. The pricing service is now centrally managed to reduce overhead. Business Rules Engine integration provides faster, more accurate decision-making.
• Faster time to market: The reusable pricing service improves time to market as the company sells into new markets and embraces new business models.
• Better compliance: Built-in compliance processes provide the required audit trails.

Partners now have self-service access to incentive programs, promotions, and return merchandise credit capabilities that previously required direct contact with a Cisco salesperson. Quotes initiated by partners through PDR can now be shared with Cisco sales representatives using Salesforce.com for further opportunity collaboration, increased productivity, and reduced cycle time. The PDR application has been localized in 15 different languages in 150 different countries around the world.

Project Organization

Boards and Councils: Cisco’s “boards and councils” governance model was critical to the success of the Commerce Transformation initiative. Cross-functional councils comprising business and IT leaders were tasked with the planning and execution of an integrated capabilities roadmap. The roadmap was developed collaboratively across teams representing different functional groups, initiatives, and capabilities.

Before the roadmap was defined, pricing capabilities were spread across multiple IT and business organizations. To provide reusable SOA-based pricing services that could be used by the PDR and other applications, the councils had to identify business rules and processes that led to the definition of a target pricing service.

SOA Project Team: Once the roadmap was finalized, a SOA project team consisting of their Enterprise Architecture team, Business Architects and IT Architects evaluated the use of SOA. As functional, operational and compliance requirements were assessed, the need for a companywide SOA platform was established. Several areas of concern associated with developing pricing as a set of business services were identified, including availability, performance, security, operational excellence, and governance. The team also evaluated existing capabilities and gaps in technology.

SOA Framework & Platform: Working closely with their business and IT counterparts, the EA team began building a framework for the identification, creation, reuse, governance and monitoring of services and composite applications. The SOA platform and framework were developed by matching Cisco’s business needs and long-term strategy with products and solutions available in the market. This early work greatly streamlined the implementation of new capabilities for many other teams within Cisco and generated positive feedback from business stakeholders.

Center of Excellence: The EA team acts as the Center of Excellence for SOA and BPM and is responsible for building the foundation for all current and future SOA and BPM initiatives. They focus heavily on the areas of concern identified during the SOA assessment to ensure a solid foundation for enterprise-class business services.

Lessons

• SOA is not about technology, but rather how you implement, operate, and govern it. A large-scale enterprise SOA rollout requires maturity from people, processes, and technology as well as grassroots-level adoption.
• SOA and BPM go hand-in-hand. Plan for it in advance.
• A combination of iterative top-down and bottom-up approaches results in faster realization of SOA benefits.
• SOA introduces additional challenges with distributed business services. The SOA technology platform must be architected for the enterprise rather than focusing on a project-by-project basis.
• The organizational model of councils, groups and collective decision-making was initially painful but important to the success, funding and adoption of this project.
• Initial success stories go a long way in creating awareness, confidence and enterprise adoption of a SOA platform. The team has seen tremendous adoption of the SOA platform after the initial success of the highly visible PDR project.
• High availability, performance and end-to-end visibility of services infrastructure are paramount for long-term sustainability of SOA-based solutions.
• When you are a large company, most of the benefits will come from volume, so target simple things (services) with high volume.
• Governance is most needed when you are about to be most successful. If you don’t have it, you will fail.

To learn even more about Cisco’s SOA approach, check out this podcast of Lead Architect Harvinder Kalsi, recorded at the December 2008 SOA Consortium meeting.  Don’t have time for the podcast, at a minimum grab the slides.  The service lifecycle approach slide is outstanding.

SOA Adoption and Value Survey -- MIT’s Center for Information Systems Research

The SOA Consortium continues to build strategic relationships with leading organizations.   Today, we are pleased to extend an invitation from Jeanne W. Ross, MIT Sloan Center for Information Systems Research, to participate in a survey investigating SOA adoption and value.  The survey is open through the end of May and all participants will receive a copy of the results. 

Jeanne’s invitation follows.

“The survey asks architecture leaders to share their views in 4 key areas: SOA adoption, current practices, value and results, and barriers to SOA success. We also intend to understand linkages, if any, between SOA initiatives and company financial performance. Our objective is to help those responsible for architecture better understand how their organizations stack up on a variety of key SOA metrics: investment, progress, reuse, and others.

The survey – which will take 10-15 minutes to complete – is available here.   The survey will be available on line through the end of May.

This survey is a joint effort of MIT’s Center for Information Systems Research and Diamond Management and Technology Consultants.  All responses will be kept completely confidential. Only research team members will know the responses from any organization, and findings will be reported only in aggregate. Of course, you will receive a complimentary copy of the full report."

Please consider participating in this survey.  I'm looking forward to the results, especially on the linkage of SOA initiatives and company financial performance.

SOA 2008 - It's the economy...

This morning’s dismal US Jobs Report and the ensuing analysis  laden with the “R-word” reminded me of a conversation our community-of-practice had on our December 4, 2007 call that I’ve been mean meaning to post on. During that call, prompted by an earlier discussion with Surekha Durvasula, I asked our members the following:

“What does the ensuing (or on-going) economic downturn mean for SOA in 2008? Will the economic downturn and associated budget cutbacks drive organizations to, or away from, SOA in 2008?”

In general, the group on the call spoke of the need for a SOA approach to respond to changing economic (and political) conditions. However, they do foresee changes in implementation investment philosophies, particularly at the resource (application and infrastructure) layers. In respect to garnering investment in tight times, organizations need to approach SOA as a joint business-IT strategy, directly linked to business initiatives.

What follows are excerpts from our call. For member confidentiality, names and organizations are not included. 

Industry practice leader - “It depends on how critical the business direction is that would be inhibited by not doing SOA. In other words, if in order to succeed in the downturn there is a business direction a company has to take that they can’t accomplish right now because of way it is functioning, like it or not, expense or not, they are going to move forward… they might be more selective in how they manage the waves of work they need to do.

I expect to see SOA going forward. Because it is based on – or should be based on -- business value, rather than just technology direction.”

Chief Architect 1 –“In the government sector, a new administration is coming on board. So, a lot of change is coming on many levels. This will create increased spending in IT and SOA specifically.

In the commercial sector, the economic situation might be a downturn mostly from a consumer perspective. Businesses will be looking at emerging and overseas markets to diversify and respond to the dollar bottoming out – manufacturing and portfolio investments. That type of business change is ripe for the development of a SOA approach.

I think we will continue to see SOA. Instead of just composite application development, we’ll see more choreography as it relates to peer-to-peer business interactions. Organizations will open up infrastructure to allow business peers to develop and consume SOA based business services.”

Technology Director – “The financial industry is definitely cutting back. But, other industries, such as telecommunications with the spectrum auctions and Verizon opening its network will continue to invest. As well, enterprises are beginning a rush to Web 2.0 and social networks, similar to the ecommerce rush. With the growth of Web 2.0/Social Networks (Google, Facebook, Yahoo!), enterprises, especially in consumer markets, will need to catch up. Both of these will result in the implementation of SOA. SOA is the backend.”

Industry practice leader – “While SOA will continue to grow, we might see cutbacks related to transformation beneath the services  because that is expensive to do. It’s a bit dangerous. But, I suspect companies might try to limp along – putting services on top of old applications. Depends on how dramatic the requirement is to transform. Such as, is the platform going to die? On the surface there will be services, cutbacks might be lower level.”

Chief Architect 2– “If you are a company faced with global competition or cost-cutting measures, you’ll still be service-enabling. But, I can see a move towards the prior point -- that underlying resource investments (applications and infrastructure) may be put off. Although, that wouldn’t be my preference.”

Business Strategist – “From a business standpoint, I think the downturn and budget constraints may help the SOA cause. I believe that people will look harder at the benefits. From that perspective, people will start to believe in SOA more from a point of necessity.”

Industry practice leader – “In other words from a downturn people will have to be more creative, and will turn towards SOA”

Join our discussion. What is your view on economic conditions and SOA? Please leave a comment, or post with a trackback. Thanks!

Ashok Kumar of Avis Budget and the SOA-C answers "SOA's 6 Burning Questions"

Ashok Kumar, Architect and IT Director at Avis Budget Group and SOA Consortium Co-Chair, answers SOA's 6 Burning Questions in a recent JavaWorld article.  In the article, Ashok shares his perspective on SOA skills, solution performance, security, and generating business value: 

"1. Is anyone saving (or making money) using SOA?

Ashok Kumar of Avis Budget Group says he is. Avis began using SOA about two years ago in portions of the company to open new channels with travel partners. “They can now do direct business with us without having to go through a middleman. So it’s saved them a couple bucks, saved us a couple of bucks,” says Kumar, who is based in New Jersey and is director of services architecture information technology. “The cost of bringing on new partners is down to nothing now because of SOA.”

Avis Budget can now bring on a new partner in a day instead of a month, he says, because with SOA it is just a matter of configuring a service rather than making large application changes. “When we started that the cost of bringing on a new partner was anywhere from $40,000 to $50,000, now it’s down to $3,000 or $4,000,” he says."

According to the article, Avis Budget's success is in the "real money" category:

"There are two kinds of payback with SOA, says Mike West of Saugatuck Technology. The first comes when IT can reduce the amount of money it spends providing services. West believes SOA adoption is still in its early stages, and that perhaps only 10% to 15% of businesses are using SOA and doing it in such a way to save money.

An even smaller percentage of companies are using SOA in such a way that they are improving earnings, he says.

The world is full of projects that can be done quickly and cheaply and offer no long-term benefit, West notes. SOA is a radically different approach to building and managing systems that create a foundation for rapid change, he says.

“The real money gets saved or gets made when you have this flexible business foundation so your business can be more profitable on a top-line basis – not just IT savings being subtracted so the top line is smaller,” West says."

Emphasis is mine.  Check out the full article.

Welcome to SOA Consortium Insights, where SOA Means Business

Welcome to the SOA Consortium Insights blog.  The intent of this blog, written by  SOA Consortium members and leaders, is to promote our core messages around the value and attainment of business-driven SOA.  In addition, we'll use this blog to highlight our working group activities and by-products, industry event participation, and SOA Consortium hosted events.

As the SOA Consortium's Program Director, I'll be your moderator, sharing insights from the working groups and SOA-C activities, and engaging the broader community in conversations around business-driven SOA. 

Expect to see frequent contributions from Richard Soley, the Executive Director of the SOA Consortium.  He is moments away from posting on the SOA-C member panel at last week's Gartner ADI conference. 

Most importantly, our members will make guest contributions here, and the bloggers amongst them will continue the conversation on their own blogs.  See the right side bar for our member blogroll. 

To best express what we mean by 'business-driven SOA', I'll end with an excerpt from our SOA Executive Summit whitepaper we published in April: 

SOA Means Business

All of the CIO and CTO participants were extremely business-focused, and in complete agreement with the SOA Consortium’s underlying premises, that:

• Service Oriented Architecture adoption is a key enabler for the 21^st century enterprise

• Service Oriented Architecture is perceived by business executives as an IT integration and productivity story, but is really a business agility story.

• Achieving the benefits of Service Oriented Architecture requires significant changes for both IT and business executives

21st Century Enterprise, Business Agility and SOA

For the CIO and CTO participants, the 21^st century business environment of globalization, constant connectivity, dynamic value chains, continuous innovation, and incessant change translates to a requirement for increasing both business and IT agility. To meet the agility challenge, these executives are employing SOA principles, practices, and related technologies.

SOA has a Business Story

Although the Summit attendees find the relationship between business agility and SOA to be self-evident, they expressed concern regarding the current industry focus on wire protocols and products, rather than business value generation and the necessary business and IT changes for sustainable SOA success. The industry – vendors, press and practitioners – must “elevate out of the technical weeds” in order to engage the business on SOA.

During an exchange of techniques on “selling SOA”, one CTO recounted early, failed attempts to interest her business executives in “a next generation architecture that provided IT flexibility and code re-use”. Her executives were not interested. Convinced that a service-oriented strategy was right for her business, the CTO changed her approach. She began speaking to business pain points, specifically in terms of business processes, activities, cost, quality and schedules. Gaining executive attention, she then explained how a service-oriented approach resolved these pressing business problems. That time, she received sponsorship and funding.

SOA Success Requires Business and IT Collaboration

For SOA success, securing funding and sponsorship is only the start of business involvement. There must be true collaboration between business and IT from strategy through business solution delivery...

Business-Smart IT Organization

To collaborate effectively, business and IT professionals must speak a common language. Historically, business professionals have been encouraged to increase their IT literacy. This has proven successful at the project execution level. However, collaboration on strategy and architecture is a business conversation first.

“Our entry is always the process and that’s what we actually talk about – how to optimize the process, how to drive the process…When I hear business people talk about systems and they mention System A, System B, System C, I know we’re in trouble. Because basically that means to me is that we are locked into the constraints of the environment.” – CTO during SOA Executive Summit

The CIO and CTO participants encourage business-smarts in their IT organizations. IT professionals, particularly senior leaders and enterprise architects, must understand the business, and be able to relate IT capability to business value generation.