Service Architectures...The service-oriented enterprise Build- to-order Plan-to-produce Demand-to-fulfill OrderOrder--to-cashcash (orchestration)(orchestration) Responsive Service

MBA 8125 IT Management

Service Architectures:Servitizing the organization

© Richard Welke 2002

Richard WelkeDirector, Center for Process Innovation

Professor and prior chairperson, CIS DepartmentJ. Mack Robinson College of Business

423 [email protected]

“think service, act process”

Agenda

Part I: Services and servitization The why and what of services

Competing on services

The service economy and service-oriented enterprises

Getting from process chaos to SOE – reference models


© R.J. Welke (2007) MBA 8125: Service Architectures Nov-07 22


Part II: Technology-enabled services Enabling technology -- web services, SOA and ESB

Process/service connection

Competing with (web) services -- Mashups

Part III: Reflection The promise, the roadblocks, the Q&A

Importance of services

Agriculture: Value from harvesting natureAgriculture: Value from harvesting nature

Manufacturing: ValueManufacturing: Value

U.S. Service Sector Growth


Manufacturing: Valuefrom producing

products

Manufacturing: Valuefrom producing

products

Services: Value from enhancing thecapabilities of people and things

Services: Value from enhancing thecapabilities of people and things

What is a service?

Req

uest

Resp

on

se

The Basic (atomic) Service …

© R.J. Welke (2007) MBA 8125: Service Architectures Nov-07 44R

espo

nse

The underlying set of actions taken

An encapsulated set of organized activities (the “process”) Encapsulation: opaque to the service user/clientInitiated by a client request for service (“the need”) andSatisfied by a service response (the “deliverable”)According to a contract or service-level agreement

Business view of a service

The triggeringevent or

document

Theorganizationalresponse to this

event

1. The Customer orClient for the service

2. “Serves” the problem-to-be-solved

3. Event thatinitiates theservice and the

A student whowants to registerfor a set of courses

Initiating event:View course choices

Example

Bu

sin

ess

Serv

ice

Valu

eStr

eam

let

Is this the “problem to be solved?”

© R.J. Welke (2007) MBA 8125: Service Architectures Nov-07

document event

A short “XA short “X--toto--Y”Y”description thatdescription that

captures thecaptures thenature of thenature of the

service providedservice provided

service and thenormal orexpected result orresponse

4. Can be expressed asa “value streamlet”in the form of “X”event that clientinitiates results in“Y” response as theservice delivered

View course choices

Service response:Course registrationconfirmation

Value streamletexpression:“View-to-Confirm”

or maybe …“Select-to-Register”

Bu

sin

ess

Serv

ice

Bu

sin

ess

Pro

cessValu

eStr

eam

let

5

So, in theory, organizations have …A “menu” of services (service registry) How initiated Response/outcome provided Service level agreement (service performance metrics) Pre-conditions/post-conditions Cycle-time (average, variance, etc.) Reliability/security

Cost/resources


Cost/resources Availability

Rating (ala Amazon-style rating system) Some amount of visibility into degree of completion Responsible person (service owner)

My car dealership has this; so does my medicalproviderDo you have a service registry? For all services?

Most organizations don’t have one6

Composite services

Act-1 Dec-1

Act-n

Business Process

Act-3

Act-3

Business processConsuming services

Process, in turnbecomes a

composite service


Fn-1 Fn-2 Fn-n

ERP/CRM/SCM Applications

Wrap-1

Other Services

Wrap-2 DB-1

7

Composite services - example

Estimation service Software modification service


QA service

The service-oriented enterprise

Build-to-order

Plan-to-produce

Demand-to-fulfill

OrderOrder--toto--cashcash

(orchestration)(orchestration)ResponsiveResponsive

ServiceService

CashOrder

Service-delivery (orchestration)

External and internal activities are encapsulated as servicesExternal and internal activities are encapsulated as services

Creates a collection ofCreates a collection ofplugplug--andand--play servicesplay servicesthat can be rethat can be re--used toused tomeet new or changedmeet new or changed

internal/externalinternal/externalservice needsservice needs


Fn-1 Fn-2 Fn-n


Act-1 Act-2 Act-3 Act-n

Order-to-verify process

Wrap-1

Existing Custom Applications

Wrap-2

Wrap-n

WS-1

New Service Development

WS-2 Ws-n

Verify-to-initiate

Order-to-verify

Complete-to-bill

Bill-to-cash

Act-1 Act-2 Act-3 Act-n

Bill-to-cash process

9

The problemMost organizations are an undocumented, highly-interdependentjumble of tasks and human/automated tasks & activities

Want to change something? Where do you start/end? Whatbreaks?


Plan-toorder

Build-toproduce

Demand-to-fulfill

Getting from activity chaos to SOEValue chains streams

Top-down,

Service-oriented

enterprisearchitecture

(SOE)

Verify-to-initiate

Order-to-verify

Complete-to-bill

Bill-to-cash

Order Cash

Order-to-cash


Fn-1 Fn-2 Fn-n


Service-based ApplicationPrc-1 Prc-2 Prc-3 Prc-n

Business Process

Wrap-1

Existing Custom Applications

Wrap-2

Wrap-n

WS-1

New Service Development

WS-2 Ws-n

Prc-1 Prc-2 Prc-3 Prc-nBottom-up,

Service-based

applicationdelivery(SOA)

Middle-out,

Businessprocess

servitization(BPMS)

Top-down approaches

Service discovery modeling approaches CBBD

EBA

RIVA

Reference model approaches


SCOR, DCOR, CCOR

VCOR

eTOM

ITIL

etc.

12

Reference model approach to SOEWhat are they? Model constructed from a predefined set of

alternative primitives (org-specific details addedlater)

Prescribed view of how the process should behave

What is their (real-world) value?


What is their (real-world) value? Modeling simplification (constrained choice vs.

green field)

Common vocabulary, enabling: Extrapolation to the broader value chain with minimal

knowledge of how partners actually operate Description of common problems and metrics Exchange of industry norms (benchmarking) and best

practices

13

DeliverDeliverMakeMakeSourceSource

PlanPlan

Supply chain reference model (SCOR)

P1: Plan Supply ChainP1: Plan Supply Chain

P2: Plan SourceP2: Plan Source P3: Plan MakeP3: Plan Make P4: Plan DeliverP4: Plan Deliver P5: Plan ReturnsP5: Plan Returns

SI: SourceSI: SourceStocked ProductsStocked Products

S2: SourceS2: Source

MI: MakeMI: Make--toto--StockStock

M2: MakeM2: Make--toto--

DI: DeliverDI: DeliverStocked ProductsStocked Products

D2: DeliverD2: Deliver


S2: SourceS2: SourceMTO ProductsMTO Products

S3: SourceS3: SourceETO ProductsETO Products

M2: MakeM2: Make--toto--OrderOrder

M3: EngineerM3: Engineer--toto--OrderOrder

D2: DeliverD2: DeliverMTO ProductsMTO Products

D3: DeliverD3: DeliverETO ProductsETO Products

Return SourceReturn Source

RSI: ReturnRSI: ReturnDefective ProductsDefective Products

RS2: ReturnRS2: ReturnMRO ProductMRO Product

RS3: ReturnRS3: ReturnExcess ProductExcess Product

Return DeliveryReturn Delivery

RDI: ReturnRDI: ReturnDefective ProductDefective Product

RD2: ReturnRD2: ReturnMRO ProductMRO Product

RD3: ReturnRD3: ReturnExcess ProductExcess Product

SCORSCOR(Supply Chain Operations(Supply Chain Operations

Reference model)Reference model)

EnableEnable

14

From choices, an SCM-specific 1st level

Simple thread diagramSimple thread diagram

Sourcesas make-

Deliversas make-

Makes-to-stock


Entire supply chain described/configured from basic building blocks

as make-to-order

as make-to-order

Buys-from-stock

15

From previous thread diagram you get


S1. Source Stocked ProductS1. Source Stocked Product

ScheduleScheduleProductProduct

DeliveriesDeliveries

S1.1

ReceiveReceiveProductProduct

S1.2

VerifyVerifyProductProduct

S1.3

TransferTransferProductProduct

S1.4AuthorizeAuthorizeSupplierSupplierPaymentPayment

S1.5

3. Prescribed level 2 processes3. Prescribed level 2 processes

1. Metrics1. Metrics2. Industry benchmarking2. Industry benchmarking

16

Many more reference models emerging

SCOR: product of Supply Chain Council (started withPMT consulting)

Used and co-developed by 200+ organizations With required use by the DoD for its primes

In addition to SCC’s SCOR, also versions for: DCOR (Development Chain)


DCOR (Development Chain)

CCOR (Customer Chain)

Other domain-specific reference models include: IT (ITIL)

Telecommunications (eTOM)

Intel (Value-chain Group) VCOR

17

Inter-organizational value chains (VCOR)


Based on value streamconcepts from

18

UpstreamUpstreamVendorVendor

“A”“A”

Competing on services IThe service-connected organization

Flexibly change

DownstreamDownstreamCustomerCustomer

“X”“X”

RegulatorsRegulators

Provide easily updatedProvide easily updatedservicesservices

Add new servicesAdd new servicesWithout impactingWithout impacting

customer interfacescustomer interfaces

Controlled visibilityControlled visibilityinto transactioninto transactionprogressprogress


UpstreamUpstreamVendorVendor

“B”“B”

ExternalServiceProvider

“AA”


“BB”


“CC”

Flexibly changeunderlying process &

delivery withoutaffecting service

interfaces

“X”“X”

DownstreamDownstreamDistributorDistributor

“Y”“Y”

Readily add vendorsReadily add vendorsFlexiblyFlexibly

accommodateaccommodateinterfaceinterfacerequirementsrequirements

Select services forSelect services foroutsourcing basedoutsourcing basedon “core/context”on “core/context”decisionsdecisions

19

Competing on services II

Shift of companies from “Pure” product company Product company with ancillary services

Services company with product as platform “Pure” services company

Examples abound in every sector

Servitisation

Servitisation


Examples abound in every sector Transport

Automotive Air travel Shipping and logistics

Entertainment Communications White-goods Business process outsourcing (=Business service insourcing)

Build “intelligence” into theproduct as (commodity)platform

Sell them the on-goingdifferentiating services forthis intelligence

Razor-blade analogy

20

Competing on services III

CompositeCompositeresultresult

BusinessBusiness UnitUnitAA provided serviceprovided service

ActivityActivity11 ActivityActivity22 ActivityActivity33 ActivityActivitynn

BusinessBusiness UnitUnitAA provided serviceprovided service


Build,Build,acquire,acquire,

ServiceA

3rd party provided service (BPO)

Compose client-desired services frominternally or externally available“service parts” (other services)

ServiceServiceprovidedprovided


1 2 3 n1 2 3 n

BusinessBusiness UnitUnitBB provided serviceprovided service


BusinessBusiness UnitUnitBB provided serviceprovided service


BusinessBusiness UnitUnitNN provided serviceprovided service


BusinessBusiness UnitUnitNN provided serviceprovided service


acquire,acquire,rentrent

servicesservicesServiceB

ServiceN

21

Break


Part II


The new service technology

??Human Automated

Activity 4

ServiceRequest

ServiceResponse

“Web Service”

Only thing that needs to be digital

A set of open standardsthat define:

• Interface and messages• Where processed• Security• Reliability

Can be made availableanywhere an internetconnection exists

Interface can be web-browser, e-mail, softwareservice call, etc.

Business


Activity 2

??Human

Activity 1AutomatedActivity 3

?? Activity 5

Activity 4

Activity 6

CreditReport

CRMSystem

ERPSystem

DBSystem

InventoryCheck

CustomerUpdate

BusinessProcess

Orchestration

Registry ofServices

24

Basic concept of a (software) serviceService A (software) component Distinct functional meaning and value for its consumer/client Encapsulated and exposed through an interface, and Specified by a contract that defines its purpose, functionality,

constraints and usage

Service-oriented architectureA framework supporting the discovery, message exchange and


A framework supporting the discovery, message exchange andintegration of loosely-coupled services, using industry standards

Service-based application deliveryOrchestrationApplication with

embeddedsequencing, rules,meta-data, events

ServiceService ServiceService ServiceService ServiceService

Servitizing theServitizing theapplicationapplication

wh

ichservices?

2525

The emerging architectural stack

Process/serviceProcess/serviceorchestration &orchestration &choreographychoreography

Events & CEPEvents & CEP

BAM & RealBAM & Real--timetimeBIBI

BP

M

Meta

Data

Meta

Data

Bu

siness

Ru

lesB

usin

essR

ules

EDA

Portals &Portals &MashupsMashups

Event

Event

Ru

lesR

ules


Services (SOAP,Services (SOAP,WSDL, UDDI)WSDL, UDDI)

Components &Objects

Applicationsoftware

ERP SCMCRM Custom

Data layer DB DWHDWHDB DM

MessageMessage--orientedorientedXact MiddlewareXact Middleware(MOM)(MOM)

Email messages (SMTP)Email messages (SMTP)

Hypertext messages (HTTP)Hypertext messages (HTTP)

Service messages (SOAP, etc.)Service messages (SOAP, etc.)

USR

SOA

BP

M

Meta

Data

Meta

Data

Bu

siness

Ru

lesB

usin

essR

ules

The basics of SOA operation (1)

(Web) Services Registry(Web) Services Registry

Service (method) name

Service contract (WSDL)

ID (e.g. URL) of SOAP node implementing

Service set (methodset) name

UDDIrequest<XML>

UDDIrequest<XML>

UDDIresponse<XML>

UDDIresponse<XML>

WSD

L

(WADL)


SOAPSOAP(REST)(REST)NodeNode

Client

BackendProcessing

SOAP(REST)

Request<XML>

SOAP(REST)

Request<XML>

SOAP(REST)

Response<XML>

SOAP(REST)

Response<XML>

GetMethod<MethodNamexmlns: “…”> Note: This is one scenario;

different ESB’s take differentapproaches (or short-cuts)

If transport isHTML, then a“Web” service

SOAP NodeSOAP Node

The basics of SOA operation (2)

ConnectionPoint (CP)

Client

Logical entityreceiving theSOAP messages

ApplicationConnector

SOAPProcessor

Parse incoming, sends/receives request,returns SOAP results

Invoke back-end processing (API, RPC, …)Examples are OLEDB, JDBC, COM, UDDI


Middleware addressSupports varioustransport mechanisms(TCP/IP, JMS, MQS,etc.)

Maintains ID info suchas URI, socket

A processor (e.g. JVM) thatloads the CP’s & AC’s

Sends, receives and performsany needed processing (e.g.translations) on the inbound& outbound SOAP messages

BackendProcessing

Service standards & inter-operability

`

ServiceServiceRequestorRequestor

Web serviceWeb serviceInterfaceInterface

Web serviceWeb serviceInterfaceInterface

Po

rtalB

usin

essP

rocess

Man

agemen

tCompoundCompoundServiceService

Service Content & Portals (WSRP)

Business Processes Modeling (BPMN)

Business Processes & Rules (BPEL)

But also XPDL, UML 2.0

But also BPML, XPDL+

QoS (WS-security, WS-ReliableMessaging)

Service Transactions (WS-Transaction,

- Services Stack & Standards -


•• Management/monitoringManagement/monitoring

•• TransactionTransaction

•• ChoreographyChoreography

•• Service registrationService registration

•• Protocol translationProtocol translation

•• Message/data translationMessage/data translation

•• SecuritySecurity

•• ReliabilityReliability




ServiceServiceProviderProvider

















ServiceO

rchestration

Service Transactions (WS-Transaction,WS-Coordination)

Service Registration (UDDI v2)But also Web Search & Proprietary ESB products

Service Description (WSDL 1.2)But also NSDL, SSDL, WRDL, WADL

Service Request/Response (SOAP 1.1)But also JMS, REST

Service Transport (HTTP)But also JMS, SMTP, FTP, MQSeries, etc.

ESBR

epo

s-ito

ry

2929

WS-I

The “Enterprise Service Bus” (ESB)

••Management/monitoringManagement/monitoring

••TransactionTransaction

••ChoreographyChoreography

••Service registrationService registration

••Protocol translationProtocol translation

••Message/data translationMessage/data translation

••SecuritySecurity

••ReliabilityReliability




































Fed

era

ted

ESB •• Management/monitoringManagement/monitoring




























3030

Where do WS’s come from?

SAP

Widgets & tools to wrap existing data sources andapplicationsScreen scrapersWrapping business processesServitization of ERP/CRM/SCM enterprise applications


Order-to-Cash

Order-to-Cash

Packaged Application

SAP

SAP’s ESASAP’s ESAinitiativeinitiative

31

What does this accomplish?Loose coupling Changes to how processing is done independent of use Can change where processing is doneInter-operability Cross-platform interactions Without concern for underlying technologies (ESB, .net, etc.)

Open, XML-based standard protocols for …discovery, messaging and invocation


discovery, messaging and invocation Independent of underlying operational platformDynamic load balancing (on “cheap” servers) Granularity of processing at the web service level Dynamically monitor and re-assign processing loadsRe-usable functional (business?) components IT-utility (integration, development, testing, change) Business-value? (coming up in next sections)

SOA and business processes

The model now becomes the“controller” of the on-going

operational process

Process/serviceProcess/serviceorchestrationorchestration(BPEL, xPDL)(BPEL, xPDL)

EventsEvents

BAM (BusinessBAM (BusinessActivity Monitor)Activity Monitor)


ServicesServices(WSDL, UDDI)(WSDL, UDDI)

Components &Objects

Applicationsoftware

ERP SCMCRM Custom

Data layer DB DWHDWHDB DM

MessageMessage--orientedorientedMiddlewareMiddleware(MOM)(MOM) ESBESB

Email messages (SMTP)Email messages (SMTP)

Hypertext messages (HTTP)Hypertext messages (HTTP)

Service messages (SOAP, etc.)Service messages (SOAP, etc.)

USR

The model is the “program”

33

Business process SOA tie-in

11I 0 22I 0 33I 0 44I 0

55I 0 66I 0 77I 0 88I 0

Bu

siness

Pro

cessO

rchestratio

n

Human-actionsw/man-machine

interfaceThe process

diagram

Gen

era

tes

SOA (Web or XForm) services


ERPApplication

ExternalSoftwareService

55I 0

In-houseComputer

Application

66I 0

A service-encapsulated process

77I 0

Selected

88I 0

parts

OrchestrationOrchestrationEngineEngine

1. Initiate A-1; move0-1 to I-3 & I-5

2. Initiate A-3 & A-5 inparallel; when bothdone move 0-3 toI-6 & 0-5 to I-8

3. Initiate A-8; move0-8 to “Output”

4. Initiate A-6; move0-6 to “Output”

Execution LanguageExecution Language

Bu

siness

Pro

cessO

rchestratio

n

executed

“Wrapper”

Gen

era

tes

SOA (Web) services

34

Functionality offered by a “BPMS”

Portal

Appian


Rules

35

Competing with services

WebWeb--

Mash-ups


Available internal web servicesExternal web services

WebWeb--servicesservices

‘mash‘mash--up’up’

36

Your mashup with Google “My Maps”1. Go to Google Maps; Click on “My Maps” tab (need a gmail account – free)

2. Create a new map and give it a title

3. Find locations on map and place markers


Enterprise mash-ups

WS-Services‘mash-up’ in

Mash-up

User needs

The new EUD …


Pool of available internal servicesPool of available external services

WS-Services‘mash-up’ in

XML

Mash-uptool

Salesforce.com will allow users to custom-build the analytical dashboard that givesthem an insight into sales performanceand other benchmarks, drawn from datastored in their Salesforce.com application

3838

Mashup: Sales leads example


Denodo example: Leads automation


Denodo example: Competitive intell


Part III


A business value “roadmap”

Mark

ets

&M

ark

ets

&P

art

ners

Part

ners

Agilit

yA

gilit

y(s

ense

(sense

--resp

ond)

resp

ond)

Tailored innovative offerings

R/T-Business intelligence (sense)

M&A operations consolidation

Adaptive processes (respond)

Multi-channel self-service

Value-chain integration

R

even

ue/S

hare

InformationInformationSystems,Systems,

??


Adaptive policies (rules)

Operational visibility

(sense

(sense

Workplace ubiquity

Quality (Six Sigma, Lean)

Regu

lato

ryR

egu

lato

ryC

om

plian

ce

Co

mp

lian

ce

Op

era

tio

nal

Op

era

tio

nal

Excellen

ce

Excellen

ce

Outsourcing/offshoring

M&A operations consolidation

“Do more with less”

Compliance (Sox, HIPPA, …)

C

ost

sC

on

stra

ints

Systems,Systems,Services,Services,ProcessesProcesses

andandTechnologyTechnology

??

EVA, ROI ..?

The prospective business value map

E = EnablesE = EnablesC = ContributesC = Contributes


SOA & ESBSOA & ESB

BPA & BPMSBPA & BPMS

Events &Events &BAMBAM

ServitizationServitization

C

C

E

E

C

C

E

E

E

C

E

C

E

C

E

E

E

C

C

C

E

E

E

E

C

E

C

C

E

C

E

E

E

C

E

C

E

C

C

E

C

E

E

C

C

E

C = ContributesC = Contributes

SO

Ato

SO

E

11

44

33

22

The problemA deepening chasm in communicationbetween senior IT and business management Recent study found that none of the CIO’s

surveyed had established a business dialog withtheir non-IT counterparts regarding services

A multiplicity of process-orientations (“we’re aprocess-oriented organization already”)


process-oriented organization already”) Process compliance for SarbOx

Six-sigma/Lean process improvement scoping andinitiatives

Bottom-up IT service initiatives to bridge gapsbetween diverse applications, ERPs and databases

45

Who’s doing it right?Significant uptake of “business as service”thinking and development in: Europe

Australia

India

What are they doing?


What are they doing? Corporate business service competency center Business service architects I/T architects Business process improvement/innovation Service governance

Funding as a corporate investment (not a project-by-project overhead item)

46

Wrapping up


Documents

Service Architectures...The service-oriented enterprise Build- to-order Plan-to-produce Demand-to-fulfill OrderOrder--to-cashcash (orchestration)(orchestration) Responsive Service