Presentation Title | Date | Page 1 Extracting Value from SOA

Presentation Title | Date | Page 1

Extracting Value from SOA


Demonstrating the ROI for SOA


Yes14%

No86%

What’s your ROI for SOA?

Have you constructed a solid ROI

Assessment for SOA?

Surveys from attendees to previous

webMethods SOA Masterclass


Business Case Basics …

Vo = Vn – [£ + T + W]

The Value of Opportunity =

+ New Value Created

– Lifecycle Cost of Effort

– Time to Implement

– Waste & Residual Garbage


SOA Promises ... Reduced costs

Vo = Vn – [£ +T + W]Cost ReducedValue Increased

Technical ConsistencyReuse of AssetsLifecycle Cost of Effort reduced

Composition RatherThan Dev

Time to Implement reduced

Reuse Waste & Residual Garbage reduced


The Cost of Delivering Applications with Reuse

Time

Development Cost ($)

App #1 App #2 App #3 App #n

To

tal C

ost

Total Cost

x

“By adopting an SOA platform from webMethods, Superpartners is

benefiting from the ability to re-use a number of services.

We have already seen 30% – 40% re-use of interfaces and services

created along with reduced maintenance costs and effort to

support business change”

- Gary Evans, CIO Superpartners.


SOA Governance Benefits …

Cell entries can be changed to see how they affect results. Cell contains derived results and is locked, but can be copied and pasted into other spreadsheets

Amounts inDesign Time Thousands (1,000)

Productivity Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate SimpleNumber of Services to be Developed 5 15 30 10 30 60 20 60 120 30 90 180 30 90 180Development Effort Each without webMethods SOA (hrs) 697 287 216 697 287 216 697 287 216 697 287 216 697 287 216Reduction in Development Effort Using webMethods SOA (%) 5% 10% 10% 5% 10% 10% 5% 10% 10% 5% 10% 10% 5% 10% 10%Labor Cost ($/hr)Productivity Savings ($K) 13 32 49 27 68 102 58 142 214 91 224 338 95 235 354Total Productivity Savings ($K)

Testing* Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate SimpleNumber of Services to be Developed 5 15 30 10 30 60 20 60 120 30 90 180 30 90 180Testing Effort Each without webMethods SOA (hrs) 349 144 108 349 144 108 349 144 108 349 144 108 349 144 108Reduction in Testing Effort Using webMethods SOA (%) 10% 8% 5% 10% 8% 5% 10% 8% 5% 10% 8% 5% 10% 8% 5%Labor Cost ($/hr)Testing Savings ($K) 13 13 12 27 27 26 58 57 54 91 90 84 95 94 89Total Testing Savings ($K)

Reuse Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate SimpleNumber of Services to be Developed 5 15 30 10 30 60 20 60 120 30 90 180 30 90 180Incremental Portion of Services Reused (%) 5% 10% 20% 5% 10% 20% 5% 10% 20% 5% 10% 20% 5% 10% 20%Development Effort Each without webMethods SOA (hrs) 697 287 216 697 287 216 697 287 216 697 287 216 697 287 216Reduction in Development Effort Using webMethods SOA (%) 5% 10% 10% 5% 10% 10% 5% 10% 10% 5% 10% 10% 5% 10% 10%Development Effort Savings when Reusing a Service (%) 80% 85% 90% 80% 85% 90% 80% 85% 90% 80% 85% 90% 80% 85% 90%Labor Cost ($/hr)Reuse Savings ($K) 11 28 88 22 59 186 47 123 390 74 194 614 77 204 645Total Reuse Savings ($K)

Total Design Time Savings ($K)

Run Time

Operations/Support Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate SimpleNumber of Services in Production 3 8 15 10 30 60 25 75 150 50 150 300 80 240 480Operations/Support Effort Each without webMethods SOA (hrs) 24 8 6 24 8 6 24 8 6 24 8 6 24 8 6Reduction in Ops/Support Effort Using webMethods SOA (%)Labor Cost ($/hr)Operations/Support Savings ($K) 3 2 3 9 9 14 25 25 37 52 52 78 88 88 131Operations/Support Avoidance Due to Reuse ($K) 0 0 1 0 1 3 1 2 7 3 5 16 4 9 26Total Operations/Support Savings ($K)

Maintenance Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate Simple Complex Moderate SimpleNumber of Services in Production 3 8 15 10 30 60 25 75 150 50 150 300 80 240 480Maintenance Effort Each without webMethods SOA (hrs) 240 78 57 240 78 57 240 78 57 240 78 57 240 78 57Reduction in Maintenance Effort Using webMethods SOA (%)Labor Cost ($/hr)Maintenance Savings ($K) 22 19 26 76 74 108 198 193 283 417 406 594 700 683 998Maintenance Avoidance Due to Reuse ($K) 2 3 8 6 11 32 15 29 85 31 61 178 53 102 299Total Maintenance Savings ($K)

Total Run Time Savings ($K) 3,180

259 544 1,142 1,799 1,889

88 343 901 1,893

78 306 803

79 83

1,687 2,835

91

10 37 98

8740%75

40% 40% 40%

Year 5

346

Year 5

206

50% 50%87 91

40%

91

127 267 560

75 79 83 87

882 926

50%75 79 83

50% 50%

Year 1 Year 2 Year 3 Year 4


653 685414

SOA Governance Benefits

87 91


8375

94

Year 1

79

197

Year 5Year 1 Year 2 Year 3 Year 4

Year 1

75

38

Increased design and development productivity is achieved with SOA governance via role and policy enforcement, service contracts, and easy access to service specifications.


278

79 83 87 91

80 168 265

Testing time is reduced due to design policy enforcement and dependency management. Efficiencies in unit testing offset slightly more complicated system testing due to modularity.

Typically the key driver of SOA savings, reuse leverages clear specifications and documentation of granular services to avoid recoding of similar functionality. The amount of services reused will differ by industry.

At run time, support effort is significantly reduced due to more granular visibility, built-in SLA management, load balancing, and controlled access to services. Reuse factors in here too because of common components.

Risk and effort associated with planned maintenance is reduced with SOA governance because of run-time version management, built-in dependency management, access control, and reuse.


SOA – Additional Opportunities

Vo = Vn – [£ + T + W] – Change the balance, change the decision

Multi-channel consistency (web, call centre, mobile ….)

Assist the move to process centric operations => BPMS + SOA

Better context for business users

Eliminate duplicate applications/Enable application replacement

Customer bonding



Improved Information Access

Nissan Europe achieved integrated SOA-based supply chain via a cost-effective multiphase modernization process, and contributed to an overall vehicle inventory reduction of almost 35% within 3 years.

ISSUE:

Accurate Inventory Data


Delivering Business Improvement To Cox

Rapid application delivery

Flexible platform for delivering on competitive improvements made in field service capabilities

The end result – Significant improvement in customer satisfaction and productivity improvement for FSRs


Telecom Financial Services

GovernmentHigh Tech

Solution Focus

Business Process Management

Service Oriented Architecture

Proven Methodolog

y

Learning from Success in Multiple Industries


SOA and BPM


SOA & IntegrationSOA & Integration

Leave& Layer

BPM Technology: The Catalyst

Process Modeling& Design

Process Modeling& Design

Collaboration, concensus

ProcessSimulationProcess

Simulation

What If?

Process ExecutionProcess

Execution

Automation& CoordinationComposite

ApplicationFramework (CAF)

Composite Application

Framework (CAF)

Codeless Development&

Productive Workspaces

Business RulesBusiness Rules

Automated decision-makingProcess Analytics& Monitoring (BAM)Process Analytics

& Monitoring (BAM)

Real time visibility$

Analytics


Delivering BPM requires access to services

Becoming dependent on a service• Where are they?• How to find the right one?• Is it the right one to use?• Will it meet my projected usage?• Will it it be stable?• Will it be impacted by other consumers?• Can I trust it?

Creating re-usable services• Services need constructing/exposing• Business programme gives visibility to future consumers and

needs


The value of BPM and SOA

Both SOA and BPM have strategic value to an enterprise• But together they provide a more holistic approach to development

and operational management

Both focus on a business value proposition and focus on a business oriented view into their respective worlds

Both create new opportunities for business:• Example: 3 week concept to retirement• Business cannot waste time in requirements documents,

specifications, etc• Losing 1 day to get into production is 5% of overall revenue

• IT must not be in the delivery process• IT must have the governance framework in place to assure success• Operations must have the governance controls to assure production

responsiveness


Agility and flexibility

0% 10% 20% 30% 40% 50% 60% 70% 80%

More rapid and flexible IT response tochanging business needs

Enhanced ability for IT to drive and/orsupport business innovation

Cost savings from more efficient delivery ofIT

Protection of past and future IT investmentsby delaying obsolescence

Improved operational service levels to thebusiness

Experienced adoptersAll respondents

Which of the following would you regard as significant business level drivers for investing in SOA?

Source: Freeform Dynamics/MWD Survey, May/Jun 2006 (Sample 1332)


SOA business value Beyond system flexibility to processes and relationships.

Flexibility

A service-based approach creates modular systems which are easier and quicker to change

1

An architecture approach that promotes service

designs which are business-meaningful

Comprehensibility

A service-based approach enables an environment in which IT capabilities can be easily

understood and specified by business analysts

3

End-to-end management of the service lifecycle which “joins up” activities from

design to operation

Value visibility

A service-based approach enables an environment

in which system value can be readily understood

by the business .

4

Reusability

A service-based approach creates software assets which can be reused across projects, making systems cheaper and lower-risk to build

2

A development lifecycle that promotes

reuse of services

I N C R E A S I N

G V A L U E

Documents

Presentation Title | Date | Page 1 Extracting Value from SOA