Changing Business and Software - IBM...E01-EDI Data Warehouse (Interfaces to and from the Data Warehouse are not displayed on this diagram) G02 - General Ledger A05 - AP S01 - Sales

®

IBM Software Group

© (Copyright) IBM Corporation 2005

Changing Business and SoftwareJames Rumbaugh, IBM Distinguished Engineer

IBM Software Group

2(C) Copyright IBM Corporation 2005

Business is Changing

Monolithic distributed

Tightly controlled open

Stable constantly changing

IBM Software Group


Case Study: Procure to Pay Process

Division

Where We Are Heading

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Division


Division

Customer

Change: Customer Order Entry

Where We Are Heading

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Shared Service

Change: Shared Service – Marketing, Billing, Receivables

DivisionDivision

Customer

Where We Are HeadingCase Study: Procure to Pay Process

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Supplier

Change: Supplier Handles Inventory

Shared Service

DivisionDivision

Customer

Case Study: Procure to Pay ProcessWhere We Are Heading

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Outsourced

Supplier

Shared Service

DivisionDivision

Customer

Change: Shipping by FedEx, DHL or UPS


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Outsourced

Supplier

Change: Collections Outsourced

Shared Service

DivisionDivision

Customer


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More pragmatic approach to re-engineering effortsGradual improvementTied to tangible business benefits

Each function where it best meets business needs:Within the organizationFrom a business partnerCompletely outsourced

Tune ongoing business without widespread disruption

Why is Incremental Change Desirable?

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Monolithic systems and applications can’t be reused

Ad hoc integration is difficult to change/maintain

Lack of standards limits interoperability

Rigidity makes small improvements hard to justify

Outsourced

Supplier


Shared Service

Division

Customer

IT Architecture is a Choke Point for Business

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E01-EDI

Data Warehouse(Interfaces to and from the

Data Warehouse are notdisplayed on this diagram)

G02 - GeneralLedger

A05 - AP

S01 - SalesCorrections

I01 POReceiving

I03 Return toVendor

I06 WarehouseManagement

MaininframePC/NT apps Unix apps3rd Party Interface

S06 - Credit App

P15 EES EmployeeChange Notice

OTHER APPS - PCAP - Collections/Credit

TM - Credit Card DB

ACCTS REC APPS - PC990CORBad Debt

Beneficial FeesBeneficial Reconcile

JEAXFJEBFAJEBKAJEDVAJESOAJEVSAJEVSF

NSFTeleCredit Fees

INVENTORY CONTROL APPS - PCCode Alarm

Debit ReceivingsDevo Sales

Display InventoryIn Home

JunkoutsMerchandise Withdrawal

Promo CreditsRTV Accrual

ShrinkAP Research - Inv CntrlAP Research-Addl Rpts

Book to Perpetual InventoryClose Out Reporting

Computer Intelligence DataCount Corrections

Cross Ref for VCB DnldsDamage Write OffDebit Receivings

DFI Vendor DatabaseDisplay Inventory ReconcileDisplay Inventory Reporting

INVENTORY CONTROL APPS - PCDPI/CPI

IC BatchingInventory Adj/Count CorrectInventory Control Reports

Inventory LevelsInventory Roll

Merchandise WithdrawalOpen ReceivingsPI Count Results

PI Time Results from InvPrice Protection

Sales Flash ReportingShrink Reporting

SKU Gross MarginSKU Shrink Level Detail

USMVCB Downloads

Journal Entry Tool Kit

Scorecard - HR

L02-ResourceScheduling

P09 - P17Cyborg

M02 - Millennium

M03 - Millennium 3.0

Banks - ACH and Pos toPay

Cobra

B01 - StockStatus

S03-Polling

P14 On-line NewHire Entry

CTS

Plan Administrators(401K, PCS, Life,

Unicare, SolomonSmith Barney)

D01 Post LoadBilling

I04 HomeDeliveries

I02 -Transfers

Arthur Planning

I07 PurchaseOrder

I12 EntertainmentSoftware

I05Inventory Info

E13E3 Interface

S04 - Sales Posting

V01-Price ManagementSystem

I10 Cycle PhysicalInventory

I55 SKUInformation

K02Customer Repair

Tracking I35 Early WarningSystem

B02 MerchandiseAnalysis

I13- AutoReplenishment

U18 - CTO

Intercept

I09 Cycle Counts

E02-EmployeePurchase

Texlon 3.5

ACH

Stock Options

I17 Customer PerceivedIn-Stock

U16-Texlon

SiteSeer

C02 - CapitalProjects

F06 - FixedAssets

US Bank ReconFile

Star Repair

EDICoordinator

Mesa Data

NEW SoundscanNPD Group

AIG Warranty Guard

Resumix

Optika

Store BudgetReporting

P16 - Tally Sheet

Cash Receipts/Credit

S05 - HouseCharges

Ad Expense

L01-PromoAnalysis

V02-PriceMarketingSupport

BMP - Busperformance Mngt

StoreScorecard

I11 PriceTesting

Valley Media

P09Bonus/HR

I15 Hand ScanApps

Roadshow

POS

S08 - VertexSalesTax

A04 - CustRefund Chks

Equifax

ICMS Credit

CellularRollover

S09 - DigitalSatelliteSystem

NPD,SoundScan

Sterling VANMailbox (Value)

I18SKU Rep

X92-X96Host to AS400

Communication

S02 -Layaways

Washington,RGIS,

Ntl Bus Systems

V04-SignSystem

I14 Count CorrectionsNARM

P01-EmployeeMasterfile

I06 - CustomerOrder

FrickCo

UAR - Universal AccountReconciliation

DepositoryBanks

S07 - CellPhones

S11 - ISPTracking

AAS

Fringe PO

Cash Over/Short

L60 MDFCoop SKU Selection

Tool

SKUPerformance

SupplierCompliance

1

I35 - CEIASIS

Misc Accounting/Finance Apps - PC/NTCOBA (Corp office Budget Assistant)

PCBS(Profit Center Budget System)Merchandising Budget

AIMSMerch Mngr Approval

Batch ForecastingAd Measurement

AIMS Admin

AIMSReportingAd

Launcher

V03- MktReactions

SpecSource

CTO2

RebateTransfer

SignSystem

CopyWriter'sWorkspace

ELTPowerSuite

StoreMonitor

AIS Calendar

Stores & Mrkts

Due Dates

Smart Plus

InsertionsOrders

BudgetAnalysis Tool

Print CostingInvoice App

AIS Reports

BroadcastFilter

Smart PlusLauncher

GeneralMaintenance

Printer PO

PrinterMaintenance

VendorMaintenance

Vendor Setup

Connect 3

Connect 3Reports

Connect 3PDF Transfer

Spec SourceSKU Tracking

S20-SalesPolling

Prodigy

PSP

In-HomeRepair

WarrantyBillingSystem

Process Servers(Imaging)

Actual Application Architecture for Consumer Electronics Company

Complexity is Forcing Change

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Outsourced

Supplier


Shared Service

Division

Customer

Standards (including open source) for interoperability

Self-defined, loosely coupled interfaces

Tools to visualize and integrate existing assets

Model Driven Architecture (MDA)

Declarative specifications and languages

Compositional techniques like Aspect Oriented Programming

But … Technology Applied Correctly can Pave the Way for successful Business Innovation

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Tying Business Models to the Supporting IT Architecture

TransformationBusiness Process Outsourcing

Mergers, Acquisitions & Divestitures

On Demand Operating Environment

Requires

ComposableServices(SOA)

Service Oriented Architecture

ComposableProcesses

(CBM)Component

Business Modeling

Development Infrastructure Management

Services Oriented Architecture (SOA)

Software Development

Integration InfrastructureManagement

Flexible Business

Flexible IT

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Three Key Concepts

Component Business Modeling (CBM)

Service Oriented Architecture (SOA)


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Identify business transformation opportunities at the business process levelMake new business process composable and flexible Model the business as components with definedservices that the business provides or consumesServices are provided by IT systems, sourced from providers or supported manually

IT Strategy

ProblemHandling and Resolution

Ope

rate

and

exe

cute

Tact

ics

(Dire

ct, R

eact

and

C

ontr

ol)

Plan

ning

and

Ana

lysi

sO

pera

te a

nd e

xecu

teTa

ctic

s(D

irect

, Rea

ct a

nd

Con

trol

)Pl

anni

ng a

nd A

naly

sis

New Product Development Sales

Customer Management

and CareBilling and Collections

Provisioning& Fulfillment

Service Assurance

NetworkResource

Development

Develop New Markets and Products Acquire and Manage Customers Develop and Provide Network Services Manage Enterprise

Billing & Collections

Management

Fulfillment and resource

Planning

Technology and Resource

Strategy and Capacity Planning

Service Testing and

performance management

Rating Customer

Billing

BusinessManagement

Strategic Enterprise Planning

Marketing

Supplier/ Partner

Settlement and Billing

ServiceConfiguration,Activation and Disconnects

Resource Provisioning

Device and Supplier Order Management

CustomerSLA / QoS

Management

ServiceProblem

Management

ServiceManagement

Enable resource provisioning

(Engineering and Construction)

Network Resource

PerformanceManagement

Supplier/ Partner Problem

Reporting &Management

Supplier/ Partner

PerformanceManagement

Service Strategy and Readiness Planning

Product Portfolio Planning

Service Development

and Retirement

Customer Care Strategy

Account Planning

Partner Product Dev.

Strategy

Sales, Channel, and

AllianceManagement

Customer Contact Operations

Market and Brand

Strategy

Brand Management

Marketing Communicatio

ns, Advertising

and Promotion

Marketing Research and

Analysis

Product Development

and Retirement

Sales Channel Strategy

Execute Campaigns an d market fulfillment

Launch Product

Sales

Alliance Strategy

Fina

ncia

l and

Ass

et M

anag

emen

t

HR

Man

agem

ent

Proc

urem

ent

Tech

nolo

gy M

anag

emen

t (IT

, R&

D, D

isas

ter R

ecov

ery)

Stakeholder Mgmt/ Legal and Regulatory

Customer Care

Management

Customer Analytics and

product matching

Order Handling

Inventory Management

Customer Interface Management

Supply Chain/Value Net Strategy

Sales Problem B&C

Loyalty and Retention

Stak

ehol

der a

nd E

xter

nal R

elat

ions

Man

agem

ent

Component Business Models Permit Change

IBM Software Group


Business Components

Business performs activitiesEx: Rent vehicle

Activities use resourcesEx: Rental car, parking spot, agent

A business component is a set of activities and resources

Ex: Rental location owns cars and rents and checks in carsIt is a virtual business unit that can operate independently

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Dependencies among Components

Activities depend on other componentsResource usageControl and information flows

Goal: restrict dependencies among componentsRegroup activities and resourcesChannel them through services

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Services

A service is an explicit interface with no “back doors”

Service has a defined contractInputs and outputsInteraction protocolPerformance

Components linked by services are substitutable

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A Business Component offers services to other components

Component NameMarket Segment

Planning

DescriptionTo analyze markets and derive targets


Planning

DescriptionTo analyze markets and derive targets

RequiredServices

ProvidedServices

Tracking Models & Targets

Product Portfolio UpdatesBusiness

Plans

Market Events

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Business components use each other’s services.


Planning

DescriptionTo analyze segments

and derive targets


Planning

DescriptionTo analyze segments

and derive targets

Component NameBusiness Strategy

DescriptionDefine business

strategy

Component NameBusiness Strategy

DescriptionDefine business

strategy

Component NameSegment Tracking

DescriptionTrack target segments

Component NameSegment Tracking

DescriptionTrack target segments

Business Plans

Tracking Models & Targets

Market Events

From “Product

Management”business

component

Product Portfolio Updates

Product Portfolio Updates

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A Business Component Map is a tabular view of the business components in scope.

Contact Routing

General LedgerDocument Management

Customer DialogMarketing

CampaignsProduct Administration

Credit Assessment

Product ManagementStaff Appraisals

Customer AccountsProduct FulfillmentSales

Credit Administration

Product Directory

Staff Administration

Executing

Compliance

ReconciliationFulfillment Planning

Sales Management

Relationship Management

Sector Management

Business Unit Tracking

Controlling

Portfolio PlanningFulfillment PlanningSales PlanningAccount

PlanningSector PlanningBusiness PlanningDirecting

Financial Control and Accounting

Product Fulfillment

Servicing and Sales

Relationship Management

New Business Development

Business Administration

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Step 2: Define a Service Model • Identify services based on business components• Make decisions based on architectural criteria

Step 3: Implement a Service Architecture• Develop a service-oriented architecture to support

the componentized business

Step 1: Break down your business into components• Decide what is strategically important• Prioritize and scope your transformation projectsCBM

Strategy

SOA Realization

ServiceModeling

Business-Aligned IT Architecture

Building an Architecture

IBM Software Group


Service Oriented Architecture (SOA)Flexible connectivity:

Represent application or resource as a service with a standardized interfaceEnable exchange of structured information(messages, documents, ‘business objects’)Mediate message exchange through a connectivity layer (enterprise service bus)Provide on-ramps to the bus for legacy application environments

Combines new and existing applications to address changing business needs

Facilitates the management of business performance, quality of service, and dynamic monitoring

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MyValueModule

Service Component Conceptual ModelModule, Import, and Export

ServiceComponentMyValue

ServiceImportCustomerInfo

ServiceExportMyValue

CustomerInfoModule

ServiceComponentCustomerInfo

ServiceExport

CustomerInfo

Web

ServiceImportStockQuote

ESB

IBM Software Group


SOA Defining Concepts Universal Connectivity: Integrates most diverse environments, bridging protocols, languages, platforms, APIs and messaging paradigms – providing scale and scope of integration required by today’s extended enterprise

Service Orientation:Facilitates loose coupling

between software components

Incremental Integration: Start small and plug in capability to enrich your implementation as

needs dictate

Open, standards-based:Open APIs and protocols support the interoperability and substitution of middleware from multiple vendors

Event Orientation:Decouples applications that publish business events from

subscribing applications

Flexibility:A variety of options

for persistence, reliability, security,

availability...Deploy where

required, manage centrally

IBM Software Group


Existing Resources

A SOA has Multiple Layers

Service Modeling

Services

Business Process

Components

QoS, Security, M

anagement &

Monitoring (Infrastructure Service)

Process Choreography

Simple and Composite Services

Enterprise Components

PackageCustom

ApplicationCustom Application

Package

ServiceC

onsumer

ServiceP

rovider

Integration Architecture

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Build high-level modelsExpressed in domain concepts

Generate platform-specific codeInto specified architectures

Using automated toolsBased on standards

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Domain modelCaptures business knowledge

Implementation profilePlatformTechnology decisions

Design modelCaptures implementation decisionsTranslator incorporates platform knowledge

MDA Approach

Domainmodel

Designmodel

Code

Implementationprofile

Programminglanguage

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MDA Requires

Domain modelsUML or domain-specific language (DSL)

Architecture frameworksMake assumptions about infrastructureUse them to remove details from models

Automated toolsModeling toolsTranslators

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Domain Models

Syntax and semantics for a particular purposeCapture business-level contentMore intuitive syntax

Reduce mindless repetitionPredefined control and data patternsEliminate repetitious control specification

Two approaches:UML ProfileDomain specific language (DSL)

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Architecture

Decomposition into subsystems

Topology

Interaction rules

Data formats

Resource management

Hooks for future extensions

Scaffolding for testing

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Architecture FrameworkFramework = reusable architecture pattern

Includes:Skeleton execution environmentPredefined subsystems and topologyInteraction and data rules, formats, interfacesAttachment points for plug-insComponent libraries of useful functionalitySample applications

Integrated development environments (IDE)Eclipse, .NET, J2EE

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Framework Advantages

Enable domain specific languages (DSL) to optimize repeated patterns

Ensure consistency

Excellent for incremental design

Enforce design trade-offs

Supports static and dynamic analysis

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Automated Tools

Modeling toolsOrganize large modelsCheck correctnessEnable teamwork

TranslatorsApply patternsGenerate repetitious codeKey to MDA

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Iterative Development

start

waterfall process

target

iteration

Iterative process

failure

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Iteration

Common baselineNo divergent versions or schedules

Specific goalsSet priorities by adjusting goals

Specific deadlineAll iterations about the same length

At the end of an iteration:Check in everythingBuild an executable systemTest and examine itReevaluate priorities

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Iterative Development Process

Series of iterations allows mid-course corrections

Executable releases permit constant evaluation

Attacking problems early reduces risk

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Summary

Business is becoming distributedComponent Business Model

IT architecture must support business modelsService Oriented Architecture

Automate business-to-architecture mappingModel Driven Architecture

Avoid monolithic developmentIterative development process

Documents

Changing Business and Software - IBM...E01-EDI Data Warehouse (Interfaces to and from the Data Warehouse are not displayed on this diagram) G02 - General Ledger A05 - AP S01 - Sales